Applying for a mortgage is one of the most important financial decisions you’ll make. The process can be complex, but understanding what to do—and what not to do—can help ensure a smooth approval and closing. At ONE Presidential Mortgage, we’re here to guide you every step of the way. Follow these key do’s and don’ts to avoid common mortgage application mistakes.
The Do’s of Mortgage Applications
1. Do Check Your Credit Score
Your credit score plays a crucial role in your mortgage approval and interest rate. Before applying, review your credit report, dispute any errors, and work on improving your score by paying down debts and making on-time payments.
2. Do Get Pre-Approved
A mortgage pre-approval gives you a clear budget and strengthens your position when making an offer on a home. It also helps you move quickly once you find the perfect property.
3. Do Maintain Steady Employment and Income
Lenders prefer consistency. Avoid changing jobs or industries during the mortgage process to prevent delays or complications with your approval.
4. Do Keep Your Debt-to-Income Ratio Low
Your debt-to-income (DTI) ratio is a key factor in loan approval. Pay down existing debts where possible and avoid taking on new debt before closing on your mortgage.
5. Do Work with a Trusted Mortgage Professional
Navigating the mortgage process is easier when you have an experienced professional by your side. ONE Presidential Mortgage provides personalized guidance to help you find the best loan for your needs.
The Don’ts of Mortgage Applications
1. Don’t Make Large Purchases or Open New Credit Accounts
Big purchases, such as a car or furniture, can impact your credit score and debt-to-income ratio. Hold off on these expenses until after your mortgage closes.
2. Don’t Deposit Large Sums of Money Without Documentation
Lenders must verify all sources of income and deposits. If you receive a large sum, be prepared to provide a clear paper trail explaining the source of funds.
3. Don’t Co-Sign Loans for Others
Even if you’re not making the payments, co-signing a loan increases your financial obligations, which could affect your mortgage approval.
4. Don’t Miss Any Payments
Late or missed payments on existing loans or credit cards can lower your credit score and raise red flags for lenders.
5. Don’t Move Money Around Unnecessarily
Lenders will review your bank statements for financial stability. Avoid making large, unexplained transfers between accounts, as this could slow down the approval process.
A smooth mortgage approval process starts with smart financial decisions. By following these do’s and don’ts, you can increase your chances of securing a loan that meets your needs and ensures a stress-free homebuying experience.
At ONE Presidential Mortgage, we’re committed to making your mortgage journey simple and transparent. Ready to take the next step? Contact us today to get started on your path to homeownership!