Financial Dos and Don’ts When Getting Approved for a Home Mortgage

Buying a home is a big financial decision, and getting approved for a mortgage is an important step in the process. There are a few things you can do to improve your chances of getting approved for a mortgage, and there are also a few things you should avoid doing.

Dos

• Get your finances in order. This means paying down debt, improving your credit score, and creating a budget. Lenders will look at your debt-to-income ratio and your credit score when they’re deciding whether to approve you for a mortgage.
• Get pre-approved for a mortgage. This will give you an idea of how much you can afford to borrow and will make you a more attractive buyer to sellers.
• Be prepared to make a down payment. A larger down payment will help you get a lower interest rate on your mortgage.
• Be patient. The home buying process can be long and frustrating. Don’t get discouraged if you don’t get approved for a mortgage right away. Keep working on your finances and keep trying.

Don’ts

• Don’t apply for too many new lines of credit. Lenders will look at your credit history when they’re deciding whether to approve you for a mortgage. Applying for too many new lines of credit in a short period of time can hurt your credit score.
• Don’t make any major purchases before you apply for a mortgage. Major purchases, such as a new car or furniture, can lower your debt-to-income ratio and make it harder to get approved for a mortgage.
• Don’t lie on your mortgage application. Lenders will verify all of the information you provide on your mortgage application. Lying on your application could result in you being denied a mortgage or even being sued.
• Don’t wait until the last minute to start the home buying process. The home buying process can take several months, so it’s important to start early. The sooner you start, the more time you’ll have to get your finances in order and find the right home for you.

By following these dos and don’ts, you can improve your chances of getting approved for a home mortgage and getting the best possible interest rate. Contact us for more information on what you will need and what you should not do when getting approved for a home mortgage.