When you are applying for a mortgage for the first time, you will discover that it is a lengthy, complicated process with a lot of paperwork and seemingly endless checks that need to be passed. If you want to make the process easier for yourself, you can start by remembering these important rules.
Do Your Finances In Order
Pay your bills and loan repayment debts on time to ensure that your credit score is as good as possible. Budget carefully to avoid overspending and prioritize saving during this period. There will be expenses that you did not anticipate. During your mortgage application, the loan provider will be looking closely at your credit history. Keep your income and outgoings as steady as possible.
Do Remember That Pre-Approved Doesn’t Mean Approved
Avoid applying for new loans while your mortgage is in the pre-approval stage. Your mortgage provider will be alerted to any new red flags. Don’t make any expensive purchases during this time. Wait to buy furniture or new appliances for your new home until after the loan has been approved, as the loan provider will be looking at your debt-to-income ratio.
Don’t Change Jobs
Stay in your job while you are applying for a mortgage even if you have an offer waiting. Mortgage providers look for stability. Any sign that there could be a gap in your repayments in future is a major red flag. Taking a promotion is fine, and you should let employer know about your application because a personal reference could help your case.
Do Hold Off On Making Any Big Deposits
Wait until after the mortgage has been approved to make any large deposits into your account. A gift sum or donation may be innocent, but it may appear as though you are counting on other people to make your payments.
Don’t Miss Anything
Answer any document request from the mortgage provider as soon as possible. There is always a ticking clock when securing your new home. Any time lost during this process due to missed letters, emails and calls could have serious repercussions. Do not miss any previous debt repayments. Having outstanding debts probably won’t make a mortgage provider deny your application. Having a record of missed payments probably will.
Do Read The Fine Print
Go through your mortgage documents carefully to see if you can afford the interest and the repayment terms. If you fail to make those payments, you will be vulnerable to foreclosure. You may be able to renegotiate your terms after some time has passed but there is no guarantee.