Now that you have found the home that you wish to purchase, the home buying processes begin. Receiving an approval for a mortgage can be very tricky, especially since the meltdown of the mortgage market a few years ago. However, tricky does not mean impossible. Most people can still get approved for a mortgage if they know what to do during the mortgage process.
When Things Go Wrong With Your Mortgage Application
The first thing that you should realize is that it takes approximately 45 days to be approved for a loan. Banks have created this lengthy process to ensure that the person they are about to lend money to is as credible as their application states. They will scrutinize the application and verify all the information, regardless of the amount of time it takes.
In some cases, if additional paperwork is required, the process can last a full two months. Bans simply cannot process these loans any faster.
During this time, things in your life can change. You may come down with an illness that is preventing you from working. You may be forced to change jobs. A storm system may have come through and damaged your current home which then will need costly repairs. All of these things can have an impact on the final approval of your loan. Sadly, these events cannot be prevented, but gratefully they do not occur often. However, there are other factors that can have an even more significant impact on your mortgage approval, each of which you can control.
Habits To Avoid During The Mortgage Approval Process
During your mortgage approval process, you should avoid the following eight situations to remain in good standing with your loan officer.
- Do not buy or lease a new car unless you absolutely have to, and then only purchase one that has a lower payment than you already have.
- Do not quit your job, change the industry in which you work, or start a new business. This will all impact your “financial stability” rating.
- Do not change from a job where you are paid hourly to one that has an emphasis on commission.
- Do not open any new lines of credit or credit cards, even if it means you get a large discount on something you are purchasing.
- Do not move large sums of money from one bank account to another, this makes loan officers think that you cannot cover your bills.
- Do not make random deposits in your bank account. This leads the loan officer to believe that you are receiving undocumented money.
- Do not accept any cash gifts from friends or relatives without completing the appropriate paperwork to document where the money came from.
- Do not miss paying any bills, regardless of how minor you view them. The loan officer will be closely monitoring your credit report.
Having this information should allow you to sail through the mortgage approval process with ease. It is also important to remember that you should clean up your credit as much as possible before even applying for a loan. This will increase your chances for approval even more.