5 Mistakes That Could Cost You a Home Loan
So, you’ve decided to buy a house and you will need financing. You’ve worked hard to get your finances in tip-top condition, but then you make one of these mistakes that will have lenders thinking twice about approving your loan.
- Buying a vehicle that you have to finance. Purchasing a car using a loan increases your debt-to-income ratio, which reduces the amount of home you can purchase and may affect your eligibility for the loan.
- Changing your job before applying for a home loan. You want to demonstrate to the bank your employment stability.
- Applying for a credit card or prompt other inquiries into your credit rating. Seeing new credit transactions translates into higher risk for lenders. Opening credit accounts within a short period of time represents risk, and your credit score could take a hit.
- Buying items for your new home on credit before buying your house. Save your money for your down payment. Charging big-ticket items to a credit card increases your debt-to-income ratio and drops the amount of loan you might otherwise qualify for and chances for a loan.
- Missing a payment or being late on a payment on a credit card. Not only will this affect your credit rating and credit history, but it would also show the lender that you are not being responsible in managing your money.
The best way to prepare for buying a home and avoid these types of pitfalls is to speak to an experienced lender. First National Bank’s mortgage lenders offer a free consultation to anyone interested in exploring loan options.
- credit score
- home equity line of credit
- mortgage loan
- mortgage refinancing