Avoid These Common Mistakes When Contacting a Mortgage Lender

Buying a home can be an exciting adventure. Of course, it can also be complicated. Several considerations go into purchasing a home, and there are numerous steps involved in the process. No matter where you are in the process, from browsing homes on the market to applying for pre-approval for a mortgage, one of the most important steps to take is contacting a mortgage lender. 

That being said, how you approach a mortgage lender is crucial. It can mean the difference between getting approved and becoming a homeowner or being turned down for a loan and going back to square one. Be sure to avoid the following common mistakes when contacting a mortgage lender to improve your chance of success. 

Not Understanding Your Financial Situation

One of the most common and detrimental mistakes people make when approaching mortgage lenders is not fully understanding their financial situation beforehand. Take an in-depth look at your income, debts, and savings. It’s important to know your credit score as well. Lenders look at all of those factors before approving applicants for loans. At the same time, having all of that information will help you understand how much of a down payment you can afford, how much you can spend on mortgage payments each month, and what interest rates you can expect. 

Not Being Completely Honest About Finances

Another mistake many homebuyers make is not being completely honest with lenders about their finances. Some omit certain debts when they’re talking to lenders. Others inflate their income a bit. Either of those decisions can cause problems.

Remember that lenders verify information before approving applicants. Exaggerating your income can ultimately cause you to be denied for a loan. Failing to tell a lender about certain monthly expenses may not render you ineligible for a loan, but it can certainly cause financial hardships for you down the road. 

Being upfront with lenders is essential. It helps them find the best loans to suit your needs and budget. It’ll also help you avoid unnecessary struggles later on when the time comes to start making mortgage payments. 

Not Shopping Around for the Best Loan Options

Quite a few potential homebuyers also make the mistake of not shopping around to find the best loans options. Many settle for the first lender that approves them. In doing so, they sell themselves short. Different lenders offer different interest rates, fees, loan terms, and other variables. Talking to multiple lenders can help you save money upfront and over the long term. Experts recommend reaching out to at least three lenders before choosing one. 

Making a Major Purchase Before Applying for a Mortgage Loan

Finally, many homeowners make the mistake of making a major purchase before applying for a mortgage loan. That might include buying a car, boat, or RV. Applying for new line of credit can fall into this category as well. New lines of credit and major purchases can affect your credit score as well as your debt-to-income ratio. In doing so, they can detract from your borrowing power and hamper your chances of being approved for a mortgage loan. 

Getting the Right Mortgage for You

Buying a home is a major milestone. More mortgage options are available to potential homebuyers now than ever before, which brings the dream of homeownership within reach for more people. Unfortunately, far too many people get caught up in the excitement of buying a home and inadvertently hurt their chances of being approved for a mortgage loan. Avoiding the common mistakes can improve your chances of approval and help you live the dream.  

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