Common Mistakes People Make When Applying for a Home Loan

When you’re ready to buy a new house and find a property that feels like home, the loan that you obtain is crucial to securing financing and making an offer on a property. Unfortunately, many people may not be approved due to common mistakes that are made during the loan application process. Here are a few steps or actions to avoid taking when you’re ready to become a homeowner to improve your odds of getting approved.

Accumulating More Debt

Your debt-to-income ratio is one of the main factors that lenders evaluate when deciding if they can trust you to repay the home loan. Although your debt-to-income range may be acceptable, you can put yourself at risk of being denied if you begin making purchases for your new home or decide to buy a car.

Changing Jobs

Your employment and work history will prove that you have financial stability and will be able to pay your mortgage each month. Changing jobs during the approval process will likely result in getting denied, especially if you have a lower salary with your new position. Becoming self-employed will also put you at risk, making it necessary to maintain your employment and avoid making any changes until after you close on your new home.

Failing to Work on Your Credit

Having good credit is essential to not only getting pre-qualified for a house but getting approved. Your credit score will reveal how responsible you are with the debt that you owe and if you’ve paid off any outstanding balances on your accounts. Most lenders require borrowers to have a credit score of at least 580 or higher, depending on the bank or financial institution. You’ll also want to report any errors that are present on your credit report to ensure that they’re removed to boost your score. Increasing your credit score will make you more eligible for a home loan as you shop around for the best loan officer in Las Vegas.