Being a first-time home buyer can be both exciting and a little scary. Knowing that you have reached your financial goals that allow you to be homebuyer can be exhilarating, but securing a loan for a mortgage can be a lot of work and getting pre-approved is very important. If you're a first-time home buyer, avoid these common mortgage loan mistakes:
Not Reviewing Your Credit Record
One of the biggest mistakes you can make as a first-time homebuyer is not paying close attention to your credit report. For most lenders, your credit report will play a big role in whether or not you're approved for a mortgage, and if you are approved, your credit score will also play a part in the interest rate on your loan. Prior to applying for a mortgage, review your credit report to ensure that there are no mistakes or debts that belong to someone else.
Never quit your job before you close on your first house. It doesn't matter how much you may hate your current job—your mortgage lender is looking at your job history and income to assess whether or not you are a good candidate for a mortgage. Never quit a job between the time that you are pre-approved for a mortgage and your closing date.
Failing to Be Organized
Lenders don't just hand out money, so you will need to be prepared to show that you are a good candidate for a mortgage loan. You will most likely need to submit copies of pay stubs, bank account statements, and proof of employment. Even after you submit the basics, the lender that you're working with may ask for more. If you're a first-time buyer trying to secure a mortgage loan, it is in your best interest to hold on to every piece of financial information you receive in case it is needed. Make sure that your loan has been approved prior to viewing homes.
Making Big Purchases
When you're buying your first house with a mortgage loan, avoid making other big purchases prior to your closing date. If you make large purchases with a credit card, it can disrupt your income to debt ratio that your lender is looking at. Likewise, spending cash to purchase things for your home can backfire as well—it is a good idea to wait until you have the keys for your first home in hand to buy anything.Share