Avoid Making These Mistakes When Applying for a Mortgage

When purchasing a new home it can be easy to be swept up in the joys of home ownership, particularly if you are a first time homeowner. Owning a home can upgrade your lifestyle and give you a sense of accomplishment; and with all that in mind many rush through the mortgage application process.

 While this is an exciting time it is important to take your time and realize that things done in a rush could slow your mortgage application process down. It is important to consider some missteps before you begin your application process that could possibly delay your application review, or even get you declined by a lender.

1.       Fail to Get Pre-approved

Buying a home is the largest purchase most will make in their lives, and before making any large purchase it is always wise to prepare. The best way to prepare when looking for a home is to get pre-approved to see if you even qualify for mortgage financing.

2.       Altering Your Credit Behavior 

Some believe if you pay off all of your bills on time, that makes it ok to use a large chunk of your credit. Too much credit is bad for your credit score and mortgage approval, because it seems to the lender that you rely on borrowing money. 

3.        Overlooking the Fine Print

Many are very eager to apply for a mortgage when they have not fully researched it, and end up being approved for a mortgage they really didn't want. Rushing when applying for a subprime mortgage is a major waste of time for both you and your lender.

4.       Bending the Truth

It may not seem like a big deal if you embellish about things like income, or credit score on a mortgage application, but in these post financial crisis days it can really hurt you. Nowadays lenders can find just about anything in your financial past, so it’s a good idea to be completely truthful.  


EMERGE INSURANCE AGENCY
904-677-5884
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How Does An Equity Affect Your Credit Score?

Many people believe that every inquiry affects a credit score however, that is not the case.  Don’t be fooled, certain types of inquiries do affect your credit score. To help keep a good score it is important to know what credit inquiries make an impact, and which ones do not.

The most often inquiry that will not affect your credit report is a soft inquiry. These inquires have nothing to do with a consumer’s attempt to get credit, and are not harmful to the report at all. Things like credit checks made by potential employers are examples of soft inquiries.

A hard inquiry is used if a person is attempting to get a loan, and it does have an effect on a person’s credit report. This information can be seen in the future by a bank, or any other lender. Whenever a person applies for a mortgage, car loan or credit card they are considered hard inquiries, or an attempt at a loan. Problems can arise if a person attempts a large amount of hard inquiries in a short amount of time. Lenders may think that the consumer is trying to obtain as much credit as possible.

In order to avoid excessive hard inquiries on your credit report it is a good idea for you to run your own credit report to see where you stand before trying to obtain a credit card or loan. It is also a good idea to wait awhile if you are turned down for a credit card before you attempt again.

EMERGE INSURANCE AGENCY
904-677-5884
Follow @EmergeInsurance Tweet