Need A Mortgage? Don't Make These Mistakes

Are you ready to buy your very first home, but don't have the money to purchase it in cash? If so, you'll need to secure financing in order to pay for it. Applying for your mortgage can be a complicated process, with there being some common mistakes made when doing so. Here are two things you should avoid doing if you want to qualify for the financing you need.

Not Looking At Your Credit Report

The main way that a financial lender is going to determine if you qualify for financing is by looking at your credit report. Unfortunately, many people do not think of checking out their credit report well before they find a home they want to buy. It's possible that there are things on your credit report that are incorrect, such as debts you have completely paid off or debts that are wrongfully on your report.

It will take some time to clear up any problems with your credit report, so you are better off looking at your report as early as possible. By the time you contact lenders, clear up the problem, and have it removed from your credit report, it could take several months before it is reflected. Even if you have an unjust blemish on your credit report, being able to explain it to a financial lender will be a big help. That blemish may disappear by the time that you are ready to close on your home.

Taking On More Debt

Mortgage lenders do not like surprises when it comes to borrowers taking on new debt. It happens all the time as borrowers get closer to closing on their home and get ready to make home improvements. Borrowers may open a new credit card to take advantage of a big sale, or buy a new car in anticipation of a longer commute to work.

Your mortgage lender will check your credit again closer to the closing date, and seeing new debt on your credit report and be a big red flag. They may not like that your spending is unpredictable, that your debt levels increased much more than what they typically are at, or that you crossed the lender's threshold for your total debt-to-income ratio. 

Don't make any big changes to how much debt you have during the mortgage process. You should be holding off on any big purchases until your mortgage is approved and you've received the keys to the home. For more information on types of mortgage lenders, like wholesale mortgage lenders, check out professionals in your area.

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