When you’re buying a home on 30A, you’re probably going to need a mortgage loan. Most people do.
But there are a few things that can quickly derail your plans, even if you’ve already been approved for a mortgage. Check out these three big mistakes people make that end up costing them the deal.
3 Mistakes That Can Cost You Your Mortgage
Three of the most common mistakes that people make include:
- Moving money around
- Applying for new credit
- Taking a new job
Each of these things can literally wreck your real estate deal. At the very least, they can delay your closing – and that throws a wrench in everyone’s plans: yours, the seller’s, and all the real estate agents working on the deal prior to closing.
Let’s have a closer look at each of these mistakes so you know how to avoid them.
Mortgage Mistake #1: Moving Money Around
Your mortgage approval hinges on stability and your likelihood of repaying your lender. When you move money around – even within your own accounts at the same bank, you put your lender on alert. It doesn’t seem like a big deal, but it actually is.
The lender is watching how much money you have on-hand when you go into closing. When you move your cash around, your lender gets thrown off – and it may look like you have less money than you do.
Lenders count all the money you have in savings when they’re looking at your financial profile. But when you own stocks, for example, lenders look at them with a 30 percent deduction. If you have $100,000 in stocks, lenders really only see that as $70,000 because stock prices can plummet quickly – and the amount matters (a lot) when you’re going into closing.
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Mortgage Mistake #2: Applying for New Credit
Credit inquiries affect your credit score – and not in a good way. If you have multiple inquiries for new lines of credit shortly before you close on your home, your lender will see that as “This person doesn’t have cash, so they’re trying to borrow money all over town.”
It makes it look like you’re not a savvy spender (or saver). Even if you don’t intend to use any of the credit you’re applying for (that’s a whole different story, and something you should talk to a financial adviser about), the point is that your lender thinks it makes you look fiscally irresponsible.
The bottom line: Don’t apply for any new credit – even store credit cards – before you close on your home. You can apply for anything you want after that date.
Mortgage Mistake #3: Taking a New Job
Stability is key in mortgages (see Mortgage Mistake #1). When you switch jobs, even if you’re going to a better-paying job, banks see you as a bit unstable – especially if you’re changing fields or moving to a new company. You don’t have the longevity you once did, which can make lenders think twice about letting you borrow the money to buy a home.
If you’re going to switch jobs, wait until you have your new house keys in your hand.
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