6 Mistakes to Avoid When Applying for a Mortgage Loan……

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If you are purchasing a new home in Georgia, it’s easy to get caught up in the excitement of purchasing your new house, especially if it’s your first time as a homeowner. That sense of accomplishment, the upgrades to your lifestyle and living arrangements, even landing a great rate on your mortgage, are all part of the ups that come with having a home to call your own.

With all of these things to look forward to, it’s understandable to want to swiftly move through a mortgage application as fast as possible. Many times, though, potential homeowners might not realize some of the little things they inadvertently do in a hurry that can actually slow down the mortgage application process to the detriment of being approved for a home loan.

Before applying for a mortgage, consider some of these common missteps and avoidable oversights that could prolong the application review, and even get you declined by a lender.

Failing to get preapproved:

Unfortunately, one of the most fundamental preparatory steps people fail to take is getting preapproved to check if they even qualify for mortgage financing. When contemplating purchasing a home, a pre-approval is essential to your success. The Pre-approval ensures that you are qualified to purchase, lets you know how much home you can afford, and prepares you for any down payment that may be required. However, not all lenders are created equally, so having a thorough pre-approval by a competent Loan Officer is critical to your success. I would steer clear of larger lending institutions or big banks.

Changing your credit behavior: There’s a misconception that if you pay off all your bills on time, it’s OK to use up a good chunk of your credit. The fact is, using too much credit is bad for your credit score and mortgage approval, since it implies a reliance on borrowing money. That doesn’t look good to the people you want to borrow from.

Indirectly shifting around your credit, like opening or closing a credit card, can also hurt both your FICO score and mortgage application because it skews your credit utilization ratio. The same goes for simply applying for new credit along with your mortgage application.

Blanking out on the “blank pages”: It’s an admirable thing, wanting to save paper and conserve trees and all. But when those empty pages of your mortgage application say “These pages left intentionally blank,” they’re blank for a reason. That doesn’t mean you can skip over them when scanning, faxing or mailing them to a lender, bank or credit union. This simple omission can invalidate your application entirely, or, at the least, hold up the process.

Forgetting to read the fine print: Be careful what you wish for. Overlooking the finer details of a mortgage application could mean getting approved for a mortgage you really don’t want. Being hasty about applying for a subpar mortgage deal is just a waste of time for you and your lender.

The same can be said about verbal agreements. Your word might be your bond, and a lender’s word might be its bond, but nothing is official until it’s in writing. Gone are the days when a handshake and a promise meant a deal was official. Failing to fill out mortgage documentation means there’s no fine print to read and could indicate a scam above anything else.

Lying: There was a time when you could embellish little things like income, employment or credit score on a mortgage application. No biggie, right? Wrong — in these post-financial crisis days, banks, lenders and the law, leave no stone unturned when it comes to anything financial, right down to the errant typo.

Any information you put down on a mortgage application — from 401(k)s to IRAs, to outstanding debts, even bankruptcy filings — can all be verified right down to the decimal point. Don’t put yourself at risk of committing mortgage fraud. And never, ever lie about your taxes.

Leaving out the legwork: Applying for a mortgage is a chance to verify some of those personal details we’ve never been sure of. Don’t know if your credit score is 320 or 780? Check out your credit before taking out a mortgage. Forgotten some of your past employment history or haven’t tallied up the exact amount of your outstanding debt? Dig into your records to get the answers. It’ll not only save you and your loan officer the work, but you’ll have the personal satisfaction of acquainting yourself with your own finances.

If you will be purchasing a new home in the near future, we would like to talk to you now. Call us today for a free Loan Pre-Approval. Its fast, free, and easy! 770-924-1111

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