Mistakes to avoid when applying for a Mortgage, Part 2

Dated: 05/28/2019

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More mistakes that you should avoid prior to applying for a mortgage. Part 2.

4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.

5. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.


6. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Why are these tips so important? Because any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.

If your plans for 2019 include purchasing a home, visit us at hfamiami.com/homebuyers to learn about our first-time home buyers’ mortgage, low-interest rates, and down payment assistance programs.

Note, the information in this post was derived from KCM.com.
 Information Courtesy of HFA in Miami Dade

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Mistakes to avoid when applying for a Mortgage, Part 2

More mistakes that you should avoid prior to applying for a mortgage. Part 2.4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation

Read More