Once in a while, someone calls us or walks through our door and says, “I got turned down for a mortgage. I don’t understand it. I think I’m a good risk.” So we sit down and talk with them, and it turns out that maybe they could get a mortgage—if they prepared properly for it and knew what to expect.
That’s why it’s a great idea to start getting organized even before you’re ready to actually apply for the mortgage. We can help with planning out your mortgage application so that when banks say no, Avrus can say yes.
Here are six things that we see people do that make their mortgage applications more difficult to process successfully:
- Not knowing their credit scores. The very first number that a lender will check is your credit score: it determines, first, whether or not you can qualify for a mortgage loan, and second, what mortgage interest rate you’ll qualify for. Make sure that you know what yours is going into the process.
- Not getting preapproved before looking at houses. Some real estate agents will require a prequalification or preapproval before they’ll even show you property: if you do the process ahead of time they can show you the homes that you can afford and will keep you from falling in love with a house that’s beyond your means.
- Not understanding all the financial obligations involved. The amount of money you’re borrowing will include property taxes and insurance premiums. Depending on where your house is located, property taxes in particular can be significant and will affect the total amount of your mortgage as well as your monthly payments.
- Assuming that they’ll get a certain interest rate. Interest rates vary daily and according to location, and they can change significantly between when you first started thinking about taking out a loan and the day of the closing on your new home. Make sure that you lock in your mortgage interest rate—and have that fact in writing.
- Taking on a significant loan. This isn’t the time to buy a new car. You’re applying for the most significant loan of your life; don’t double-down with a second significant loan at the same time. If you apply for a new-car loan at the same time that you apply for a mortgage, the loan will affect your credit score and may lose your mortgage rate—or even the mortgage itself!
- Not telling your mortgage broker everything. The reality is that everything you do, financially, is visible to your mortgage specialist and to your potential lenders. If you attempt to hide something, the only person you’re fooling is yourself.
These are considerations that aren’t necessarily obvious to people applying for a mortgage for the first time, but they are dangerous for all of that; they can means the difference between getting a great mortgage rate or simply an “okay” rate—or, indeed, between getting a mortgage and not getting one! Talk to your mortgage specialist to learn more about how to make the preapproval process go smoothly for you
At Avrus Financial and Mortgage, we’re ready to help you navigate the mortgage process and find you the right mortgage for your specific needs.
Why not ask us how… today?
