This short video will shed some light on what a lender is looking for when they view your mortgage application and gives you three things that you should not do just before, or after you apply for a mortgage loan. Doing any of them could derail your purchase plans.
Transcript
When you apply for a mortgage loan, the lender has one major question in mind, will you pay back the money we're lending you? And they don't just guess at that.
They're gonna look at your credit file to see what kind of history you have on making good on your promises. They're gonna look at your current employment status and your history to ensure that you have a stable and reliable income to service the loan. And they're gonna look at your total debt to make sure that you're not overextending yourself.
With that in mind, here are three tips, things that you should not do when you're about to apply for a mortgage or you've just applied for a mortgage, but not yet closed on your home sale.
Number one, don't make any major purchases that would require you to take out another loan. The lender will almost certainly recheck your credit before closing, and if you've purchased a $50,000 car with an $800 a month car payment, that may disqualify you from buying the house that you've selected. In that case, you'd be unable to close. And you'd actually lose your deposit when you collapse that sale.
Secondly, don't make any employment changes. Those can send up red flags and make lenders nervous.
And finally, don't open any new credit accounts. If you open a $50,000 line of credit, the lender may become nervous. They'll almost certainly view that amount as a debt, even if you haven't taken any money out on that credit account.
So, follow those three tips. You should be fine to make it to the finish line and get into your new home.
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Norm Fisher
Royal LePage Vidorra
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