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First Time Homebuyer Series: 3 Mistakes After Pre-Approval

 

It’s an exciting time to get Pre-Approved for a mortgage and finally start shopping for your new home. What some people forget is that Pre-Approval does NOT equal Approval.

With that in mind, here are 3 Mistakes others have made after getting a pre-approval and how to avoid them.

1.Writing an Unconditional Offer

You may have perfect credit, amazing income, and your down payment and closing costs all saved up, however part of the mortgage approval is making sure that the lender will lend on the property. If there are issues with the property, such as not being in a marketable area, issues with flooding, issues with the foundation, the property was a former grow op, etc. The lender may not lend on it.

If you ever consider writing an unconditional offer, which I highly recommend not to, then be sure that you can pay for the property up front in cash.

It’s better to play it safe and write, at the very least, a financing condition so you are protecting yourself and your family.

2. Changing Jobs

The Pre-Approval that you have been given is based on your current financial situation with your current employer and income. Changing jobs, even though you may earn the same or more with another employer, may have a huge impact on whether you’ll be approved for a mortgage. Lenders like to see tenure as this lowers the risk factor for their lending. They may make an exception for someone who has many years in the same industry where it is not uncommon for people to move from employer to employer, however there is still a risk that the lender may not use your income to qualify.

It would be best to stay with your current employer until after you take possession of the house before making a change.

3. Miss Bill Payments

You’ve likely worked very hard on your credit to be able to get to a point where you can finally start home shopping. Don’t jeopardize this by missing a bill payment as this may immediate affect your credit score. Why this is important is because lenders will only accept credit bureau reports that are issued within 30 days of the application. If a new bureau shows that you’ve made a late payment, your score will have likely dropped, causing you to potentially have to wait longer for you to qualify again.

In short, be diligent with all of your payments!

If you have any questions regarding Pre-Approval or Approval, please contact Rose Blankenagel today.

- Real Mortgage Advice