4 Things That Can Stall Your Mortgage Approval
Apr 26, 2017 | Buyer Education
While mortgage applications are assessed on a case-by-case basis, there are factors that everyone should avoid to keep the approval process on track. Be sure to use our tips below to avoid stalling your mortgage approval!
1. Your Employment Status
It’s no surprise that the amount of money you earn each month is a huge factor in how much you can afford for your mortgage. While applying for a loan program, it’s best if you avoid any changes in your job status, as those can adversely impact your application. If a change does happen, whether you go on maternity leave early or you lose your job, it’s important to inform your lender right away.
2. Your Credit Report
Mistakes on your credit report can happen, and if you spot an error, your first instinct might be to dispute it. But if you’re applying for a mortgage, you might want to think twice. When you file a dispute, the creditor has 30 days to respond. Typically, a lender will not approve your mortgage until after the dispute is removed from your credit report.
The best way to avoid this is to check your credit score annually. This way, you can fix any credit issues before you are too deep into the process of looking for a new home.
3. A New Credit Card or Big Purchase
Right before you close, your lender will perform a final check to ensure there are no outstanding debts or credit inquiries. A large purchase or new credit card will show up during this final check, and could potentially present a problem. While you are waiting for your loan to clear for closing, avoid buying any furniture or opening up a new store credit card.
4. Not Providing the Right Documentation
When you meet with your lender, it’s important that you bring all the necessary pieces of documentation to help keep the process on schedule. You are going to have to provide detailed documentation of your entire financial profile, which may include:
- 30 days of pay stubs
- Two years of tax returns and W-2s
- Year to date business statements (if you are self-employed)
- Explanations and paper trails of all deposits and withdrawals above $1,000
- Home insurance quote
- Information about any additional homes/businesses you own
If any new information is brought to light when the lender runs your credit, you will be required to document and explain it.