After reading many articles and hearing personal horror stories of home buyers that lost their home loan just a few days before their closing date I wanted to take a few minutes and summarize some of the mistakes that can take you from approved to declined in a home loan process.
1)“Won’t that wall look great with a brand new couch?”:
I know how exciting it can be when you find your dream home and all you can think about is how great its going to look once you get in there and give it your expert decorating skills. I mean aren’t we are all experts in our own home? Hold on though you can dash your dreams by running all over town and making purchases on credit. I have never heard of a mortgage company not pulling the buyers credit one last time before closing and if there are new balances on current credit cards or a new credit card this raises a huge red flag can mean a delay or cancelation in the loan process.
2) “Honey I quit my job but before you shoot me it was for another one!”:
New jobs, mostly if its for a raise and better hours, are usually times for celebration but not during a home loan process. Mortgage companies not only look at your income level but the stability of your job history so when you get a new job this puts that stability in question. Most companies require 30 days of pay stubs to prove income so a new job could push your closing date back 30 days or cancel it all together.
3)How about we skip this months car payment to have more money for our downpayment.”:
As I have said before mortgage companies can and usually do check your credit again before closing. Late payments no matter the good intentions can hurt your credit which in turn hurts your potential new home mortgage. This means knowing and preparing for all closing costs long before you start the process so you can put yourself in a good financial ship and sail into your new home.
So stay in contact with your lender and avoid these common mistakes so you can have a smooth and enjoyable home buying process.
The Kniffin Team