Applying for a mortgage with many lenders might be tough if you are a first-time home buyer. This is because first-time home buyers are not sure how to go about it. Lenders want to know if you can afford to buy the home you want. When applying for a mortgage, you will be asked to answer a series of questions, complete plenty of paperwork, and negotiate on the topic.
Since this is your first time, you can easily make a few mistakes that can jeopardise the application before it even gets through to the lender. Such errors could even cost you the home you want to buy. As a result, it is vital that you apply for the greatest mortgage arrangement possible.
Here are some of the early errors you should avoid to prevent jeopardising your mortgage application:
1) Paying No Mind to Your Credit Score
A borrower is expected to have a good credit score before applying for a mortgage loan. However, some people make the mistake of not paying attention to such a vital factor. If your score is poor, consider improving your credit score by paying your bills on time and remaining cautious of your borrowing activities.
2) Making Many Home Loan Applications
It is important to apply for a loan only when you are sure you can get that mortgage. Try to consider the fact that sending too much information to many brokers and lenders can be a turn-off. Therefore, rather than applying for many different mortgage deals, evaluate sending an application for the best deal that you can achieve. Quality over quantity.
3) Shutting Down a Credit Card Account
Borrowers need to be aware that multiple credit card balance transfers have a negative impact on your credit file. Lenders view you as clients that can’t afford to pay their bills. It is a must to be aware of the fact that when you have several credit cards, you are viewed as a risk. Therefore, it is vital that you avoid closing down and reopening new credit card accounts.
4) Having Too Much Debt in Your Report
For you to be viewed as a good credit risk, the lender will need to see that you are in good financial shape. As a result, you should ensure that your credit report is free of default debt to reflect in your credit score and mortgage application. Consider applying for a debt consolidation loan if it can reduce the amount of debt in your credit report.
5) Impulsively Using Large Amounts of Your Savings
It is a good idea to consider keeping your savings to yourself, as spending a large amount of savings could lead to a delay or denial in approval. When applying for a mortgage loan, you should be cautious of making impulsive mistakes that could jeopardise your application prior to submission. It will be easy for you to apply for the mortgage loan that you are looking for.
As one can see, there are some vital mistakes that you should avoid to prevent jeopardising your loan application. If you want to be approved for the mortgage loan you need, you should be very keen on the process and never make hasty decisions.
Looking for a mortgage broker? Wealthy You is an Australian mortgage company that’s been servicing Sydney for almost a decade, offering a variety of mortgage solutions to meet your specific financial needs. Get in touch with us now!