A home purchase will always be an exciting time for homebuyers – whether it is your first time buying or not. However, if you’re applying for a mortgage, it is common to make mistakes that can cost you your home loan application. The thing is, not all mortgage mistakes can be reversible.
Good news is, there are lots of ways that can help increase your chance of getting approved for a mortgage. If you anticipate applying for Conventional Loans Plano this year, make sure to take note of the following mistakes often made by homebuyers.
Opening New Credits Before Closing
You may have a good DTI ratio during application, but if you begin more credit accounts before closing, it can increase your Debt-To-Income Ratio. If it falls above the DTI requirement of your lender, it can ruin your chance of sealing a Conventional home loan deal.
Settling For A Single Rate Quote
Not all lenders have the same rates, as with mortgage loans having different terms and conditions. Make sure to shop around for lenders and explore other options to check which works best for your situation.
Failure To Correct Credit Report Errors
You can’t be 100% sure that your credit report is error-free. This is why it is a must for you to obtain a copy, check it for any mistakes and make sure to dispute any errors found. This way, you get to prevent credit information misuse and know where to start on improving your FICO score.
Making The Smallest Down Payment
Just because you’re qualified for a Conventional loan by putting down the lowest down payment possible already means you need to settle for that. However, there are certain perks you can enjoy by placing a bigger down payment. For example, opting to pay the smallest down payment possible even if you have the means to pay for the 20% can lead to you having to pay more upfront fees such as Private Mortgage Insurance.
Not Checking If You’re Qualified For First-time Home Buyer Programs
First-time homebuyer programs and grants can help pave the way for easier homeownership to first-time home buyers. Not checking if you’re eligible for one can make you lose your chance of sealing better deals, better rates, and even tax breaks.
Thinking You Only Need To Get Prequalified For A Conventional Loan
With a mortgage prequalification, the lender qualifies a borrower based on the given information you will be providing them. What you need is to get preapproved for a Conventional loan. This way, the lender verifies all information submitted to them, letting you know how much of a house you can truly afford to buy.
Recommended Read: First-Time Homebuyer Grants & Programs