You’ve decided to buy your dream home. You have gotten pre-qualified and are eager to start house hunting – if you haven’t already started. As you begin, you need to be aware of what not to do during the mortgage process.
Below are five pitfalls that many new homebuyers aren’t aware of that can complicate the mortgage process. The good news is that they can be avoided.
Pitfall #1: You are house hunting without knowing what you can afford
Your Pinterest board may be alluring as you get more excited about finding your dream home, but house hunting without knowing what you can afford is the #1 pitfall during the loan process.
You might say, what’s the big deal? You are simply looking at your options, right? That’s true, but you could end up falling in love with and, in a worst case scenario, buying more house than you can afford. Once you are pre-approved you might find out that you can only afford a fraction of your Pinterest dream home.
On the other hand, a pre-approval will ensure that when you do find THE ONE, you can make a stronger, more competitive offer since your income and assets will have been verified by your lender.
Pitfall #2: You don’t respond to your mortgage advisors and their team
You might not think it’s a big deal to ignore that missed call, but if you want to close on your mortgage in a timely fashion, you need to respond promptly to the team that is working diligently to get you to the closing table.
Smart home buyers are available and willing to quickly provide answers and documentation to help the mortgage process move along smoothly and quickly. They keep their communication lines wide open. It’s your home so own the process.
When the mortgage team requests documents, send them quickly. Remember that the mortgage team is on your side and eager to create an efficient and speedy path to closing day. They strive to keep you up-to-date throughout the process, so closing your communication lines is what not to do during the mortgage process.
As an additional tip, it is a good idea to keep a record of documents you receive throughout the process as this will help you respond quickly without turning your home upside looking for important files when the call arrives.
Pitfall #3: You plan to quit or change your job
Smart home buyers are masters of stability during their entire mortgage process. They do not make any sudden job changes. They know how to stay put and focus on what they’re gaining: a beautiful new home. Therefore, they will seek to keep their current employment and make sure that their income remains steady throughout.
You might wonder, why endure the frustration of remaining at a job that you may not be happy in? The reason is that changing your job can result in a denial or even raise red flags with your lender that will require them to get a new loan approval. Who would want to start the whole process from scratch again?
The only welcome change during the loan process is a promotion and pay raise.
Pitfall #4: You open and close lines of credit
During the mortgage process, you should avoid opening and closing credit lines, co-signing loans and making major purchases such as a car, another home, or large furniture. You may be eyeing that latest car model, but this is not the right time to purchase it.
Smart home buyers are aware that the most important thing in purchasing a new home is understanding their overall credit picture. If you don’t know what yours is, you can request a free credit report from one of the major credit reporting bureaus. Keeping an eye on your credit during the loan process gives you the power to enjoy the experience knowing you will get to the closing table on time.
Pitfall #5: You are not asking questions
Knowledge is power in the mortgage process. The more you understand, the less scary the process will be and the more confident you will become. Buying a home is a major investment but it doesn’t have to be daunting or discouraging. We encourage you to ask questions, and be involved in the process. Refraining from asking questions is what not to do during the mortgage process.
Smart home buyers ask as many questions as they need to understand the mortgage process. Remember that there is no such thing as a silly question when you are investing in a 10- to 30-year financial commitment.
When you understand the process and the importance of every stage, you will be better prepared to provide what is needed to achieve a smooth and quick mortgage process.
The journey to closing your mortgage doesn’t need to be intimidating, scary or frustrating.
As long as you avoid these pitfalls, the process will be smooth and seamless as you prepare to move into your new home.
If you have any questions, contact us. We’d love to hear from you.