Here are five things in particular you should avoid before applying for a mortgage — followed by five things you should do:
- Taking out other loans.
- Racking up credit card debt.
- Missing credit card payments, car payments, etc.
- Blowing your savings.
- Changing jobs, or taking a leave of absence.
What should you not do before applying for a mortgage?
Here are 10 things you should avoid doing before closing your mortgage loan.
- Buy a big-ticket item: a car, a boat, an expensive piece of furniture.
- Quit or switch your job.
- Open or close any lines of credit.
- Pay bills late.
- Ignore questions from your lender or broker.
- Let someone run a credit check on you.
What happens if you get rejected for a mortgage?
Being refused for credit won’t, in itself, hurt your credit score. Your credit report will show that you applied for a mortgage, but it won’t show whether you were accepted. However, being refused a mortgage can lead to more attempts to get one, and each application will leave a hard search on your report.
Does having debt affect getting a mortgage?
As far as your personal debt is concerned, it won’t necessarily stop you from getting a mortgage altogether, but it will affect the amount a lender is willing to lend. To make sure you can afford a mortgage, lenders look at your disposable income. You should, however, include repayments of commercial student loans.
What can affect a mortgage application?
What affects my eligibility for a mortgage?
- The size of loan you want to take out.
- How much you’ve saved as a deposit.
- The type of property you want to buy (certain properties such as flats above cafes and bars are deemed riskier to lenders)
- Your employment status (the longer you’ve been in your job, the better)
Do mortgage lenders check your bank account?
Your lender will also want to see that you have at least a few months’ worth of mortgage payments available. Your lender is also checking your bank statements to be sure that your assets are “sourced and seasoned.” “Sourced” means that the lender knows where your money is coming from.
What do banks look for when applying for mortgage?
When reviewing a mortgage application, lenders look for an overall positive credit history, a low amount of debt and steady income, among other factors.