Avoiding Common Mortgage Process Errors, Part 1

At Primary Residential Mortgage in Shoreline, we’re proud to be your one-stop mortgage lender for a variety of mortgage types, from traditional conventional formats to numerous specialty programs and more. We’ve walked hundreds of clients through this process in the past, helping them understand the areas they need to prioritize and the financial elements they should have at the ready.

This also means we’ve seen a number of significant mortgage mistakes made over the years – and we’re here to make sure you don’t fall into any of these pits as you navigate your own mortgage process. This two-part blog will take you through some of the most significant areas to be diligent in.

Bankruptcy or Foreclosure

For starters, while it may seem basic and obvious, one of the single biggest obstacles to getting the mortgage and home of your dreams is a bankruptcy or foreclosure in your past. Both of these situations will stick with you for years, lowering your credit score and limiting your ability to qualify for loans. Do everything you can to avoid any situation where these results are a possibility.

In addition, if you’re in a previous home situation, avoid late payments. Even if your credit score meets certain thresholds, you may be denied a loan if your record shows too many late payments.

Refinance and Listing Errors

One common mistake we see in the refinancing realm is homeowners who first list their property on a multiple listing service (MLS) – a service used by groups of real estate brokers to view listings of various properties – and then attempt to refinance the mortgage on this same property within the next six months or longer. Lenders will not view this positively – they won’t want to give you an additional loan for a property you clearly don’t fully want or have recently tried to move off of.

Derogatory Accounts on Credit Report

There are several elements that may impact your credit score, and one of the largest is the presence of charge-offs or collections on your credit report. These can destroy your score, which can in turn disqualify you from many loans and significantly raise your rates on those you do qualify for.

Failure to Lock In Rate

When you’ve taken many of the application steps and have found a good interest rate, it’s important to lock it in. You have the option to float a rate when you apply, but you should only do this if you fully understand the options and are willing to risk your rate rising significantly.

Not Pre-Qualifying or Pre-Approving

Before you begin a property search, you should have an idea of what you can afford – and pre-qualification or pre-approval is the way to go about this. These are basic reports that require varying levels of documentation and history to give you a general range you can consider.

For more on avoiding major mortgage errors, or to learn about any of our mortgage loan services, speak to the pros at Primary Residential Mortgage in Shoreline today.