Avoiding Common Mortgage Process Errors, Part 2

In part one of this two-part blog series, we went over some of the primary errors made during the stages of the mortgage process. This is a detailed process that requires care and precision, and there are a few areas where the wrong behaviors – whether now or in the past – could have a big impact.

At Primary Residential Mortgage, we’re proud to help all our mortgage clients navigate the ins and outs of the process for any of our loan types offered. Here are a few additional areas to keep a very close eye on, including spending and credit factors, historical areas and one must for all home shoppers.

Spending and Credit Habits

In the period just ahead of applying for a mortgage, you want to be very careful about the spending habits you take and the credit accounts you maintain. Both opening new credit cards and making large purchases on existing credit cards can hurt your credit score significantly in the short term, and this will increase your debt load – disqualifying you from certain loan types in the process. If you have a large purchase that needs to be made, do your best to wait until after the mortgage has been obtained.

Down similar lines, don’t apply for a mortgage if you know your credit is bad. Instead, take the steps to improve it using basic responsible financial practices before applying when it’s come up a bit.

Housing History

Even if you haven’t owned a home in the past and have only rented, you need to be able to show at least 12 months of a housing history. If you aren’t able to doo this, you will have to provide verifiable assets that cover at least two months of mortgage payments, taxes and insurance.

All of this is to prove to lenders that you can repay the funds needed on time. If there isn’t past proof that you’ve done so, lenders will demand it in the form of current proof in your bank account.

Employment History

Another historical area that holds a lot of weight in any mortgage situation is your employment history. If you can’t show that you’ve been consistently employed for the last two years, or at least that you’ve been a student or had other obligations during that period of time, you’ll have trouble getting approved for many mortgage types. Employment is a big part of your ability to repay your loan on time, and therefore a big factor in the approval process.

Lack of Comparison Shopping

Finally, like any major product you’ll purchase, take the time to do the research and shop around. Compare different loan programs and products, including whether you want a fixed or adjustable mortgage rate.

For more on avoiding common mistakes during the mortgage process, or to learn about any of our mortgage loan services, speak to the staff at Primary Residential Mortgage today.

*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Florida Office of Financial Regulation MLD646. Opinions expressed are solely my own and do not express the views of my employer.