The low-interest rates and loosening mortgage qualifications today make it easier to get an approval. Many lenders are introducing low down payments loans for as little as 3%, with some even offering without a down payment. While getting an approval is not that hard, some potential buyers find it hard to keep the approval until the buying process.
Avoid Bad Mortgage Behaviors
The problem boils down to bad habits or mortgage behaviors. It is important to note that some moves can sabotage your mortgage, causing the lenders to deny it or take away the approval. This is especially true if you make another big purchase like a car (or trade it up to a larger lease). Other bad mortgage moves you need to avoid include:
- Quitting your job or starting a new company
- Transferring large amounts between different bank accounts
- Forgetting or failing to pay bills
- Getting new credit cards
- Making undocumented deposits into your account
Prioritize Home Purchase
Working with your lender, of course, will help you identify other moves that can sabotage your approval. Wasatch Peaks Credit Union and other mortgage loan providers note that it is important to think carefully about your financial moves, especially those that will involve significant changes in your income. Making home purchase a priority will help you focus more on keeping the approval until you ready to move into your new home.
Practice Good Financial Habits
Other than eliminating these behaviors, it is important to practice good habits like paying your bills on time. When it comes to down payment, note that while you can get a loan with little to no down payment, it is best to pay as much as you can. If possible, pay 20% to avoid private mortgage insurance and decrease your monthly payment.
Significant life changes can change the status of your loan. If you want to keep the approval, keep good financial behaviors. Remember that if, for instance, you lose your job or switch from a salaried job to a commissioned one, your lender can revoke the approval. It also important to work closely with your lender to choose the right type or loan term for your situation.