After the long house search, you have finally found a perfect property on sale in Berwyn. You’ve even made an offer and provided the mortgage preapproval documents. You’re feeling confident about this real estate deal, and you don’t see anything going wrong.
What you don’t realize is that your home loan may fall through last minute, and you have no option but to terminate the contract. Whether you’re applying for your 1st or 2nd mortgage, seek insight on how you can prevent this from happening. Don’t assume that since you acquired the first mortgage with ease, the second home mortgage will be the same as you’ll face new challenges.
What's in this article?
To help you out, here are obstacles to avoid when closing on your home loan.
Messing With the Down Payment
Mortgage companies will require you to inform them how you’ll raise the down payment. They want to know the source of this money as it determines whether you qualify for a home equity loan. It’s a mistake to change this down payment source as this may cause your house financing to fall through.
To avoid this mistake, seek insights from your mortgage lender to know the down payment terms to follow. The lender will even guide you on alternative ways you can raise the house down payment money. For instance, you’ll get guidance on the down payment assistance program.
You need to learn what you need to qualify for down payment help and the paperwork to provide. You’re seeking information on how long it takes to complete this process. Also, you’re looking for home loan options with a low down payment, such as the FHA home loan.
Ready To Take Your Next Step?
Failing to Provide Accurate Details
When applying for a mortgage loan, you’ll have to fill in forms and submit documents that offer your personal details. Some people either fail to provide all these details, or they lie. Others fail to answer all the questions raised by the loan officer.
By failing to offer all the information the bank needs, you’re hurting your chances of qualifying for a home equity loan. You must be open and transparent when sharing information with the loan officer. Understand that this information is fundamental in determining whether you qualify for a mortgage loan and how much you get.
If you’re uncertain about a certain question on your home loan application form, don’t lie or leave it blank. Instead, seek help from your loan officer in Berwyn. This expert will also help you know the differences between various types of home equity loans. For instance, the difference between Fannie Mae home loans and the Freddie Mac loan.
With this information, it’s easy to decide the specific home equity loan to get. For instance, when to go for a VA loan for a second home, or for Fannie Mae loans. The idea is to know the best loans to use when buying a first or second home.
Purchasing High-Cost Items
The house search and purchase process are long, and when undertaking it, you’ll incur other expenses. However, it’s a mistake to purchase high-cost items like cars or boats before completing this process. These purchases will affect your cash reserve or the income to debt ratio, which are some of the items checked when applying for mortgages.
So, the safe bet is to wait until you get the home loan to consider buying these high-cost items. However, if you need a high-cost item urgently, you should reach out to the mortgage company before buying it. You want assurance that buying this item won’t affect home loan qualification.
Failing to Consider All Financing Options
Many people don’t realize that getting a mortgage to buy a primary residence is different from getting a property investment loan. That’s why most of them end up applying for the wrong loan, which they either fail to qualify for or get a low amount. To avoid this mistake, start by researching various house financing options in the Berwyn area.
For instance, find out more about investment property loans and when you should consider getting them. You want to learn the eligibility requirements for these loans and how much money you’ll get. You should compare them with the government loans, such as USDA loans, to see which ones best suit your needs.
Look for a company that’ll guide you on applying for the USDA home loan or the FHA loan. You want to know the requirements for these loans and determine which one you qualify for.
With the prospects of moving to Berwyn, you’re already looking for a new job in the area. However, it’s a mistake to accept any new job offer before completing the house financing process. Doing this may cause the mortgage lender to decline your loan application.
Avoid changing jobs until you complete the house purchase process to be on the safe side. If you’ve received a job offer, you can request the hiring company to give you more time.
Failure to Pay Bills on Time
Whether you’re applying for a home or a construction loan, the lender must check your credit score. The problem is that some people do stupid things that hurt their credit ratings, such as failure to pay electricity bills on time. Although this seems like a minor issue, it’ll negatively affect your credit score.
To ensure that the bank approves your mortgage loan, you must pay all your bills on time.
Taking Out Other Loans
Another thing that hurts your chances of qualifying for a residential mortgage loan is taking out other loans. For instance, you may take out a loan to start a business or fund a personal expense. The problem is that these loans affect your income to debt ratio, thereby impacting your home loan’s qualification.
Before you borrow any money, reach out to a top residential mortgage services company for professional advice. You want to know how taking a new loan affects your home loan qualifications. Also, you’ll get insights on how having more debts will impact the home equity loan rates.
Get a Home Loan Quickly in Berwyn
To simplify getting a home loan, you need to select a reputable and licensed mortgage lender in the Berwyn area. This lender will give you information on what you need to qualify for a mortgage loan. Also, you’ll get professional help on how to avoid all the above obstacles.
Call us today and find out more about the residential mortgage services we offer.