Mortgage Application: Three Tragic Mistakes to Avoid

Posted on Feb 27 2016 - 3:44pm by Business Day TV

Mortgage Application in Salt Lake CityYou have a squeaky-clean credit history, have a substantial down payment, and you have already been qualified for a mortgage and have the perfect house ready. However, the mortgage lender withdraws your eligibility without much notice.

It might appear that you are just unlucky but uponcontacting your Salt Lake City mortgage lender like, they point out some actions that led to the change of status. Such scenarios abound, leading potential property owners to miss many lucrative opportunities. Here are some of the mistakes that could derail your mortgage application.

Applying for a new credit card

It may seem natural to apply for a new credit card at a furniture store as you prepare to furnish your new home, but that is a grave mistake. New credit inquiry dings your credit score, and you lose a few points. The lender may also worry that you might max out on your credit card a fail to remit your payments on time or default altogether.

Making large purchases

Large expenses such as buying an expensive TV or leather seats not only drains your cash reserves or increase your debt levels. Wait until the mortgage clears to buy a new car, even when you can comfortably afford it. Avoid making any purchases that would have an adverse influence on the debt-to-income ratio as it can propel you past the acceptable level.

Closing credit accounts

It might seem the right time to close any unused credit accounts or transfer your balances to a new card offering zero interest transfer, but that would be a mistake. While it is a sound financial move, your credit score could suffer when you lose some points.

READ  4 Occasions that Call for a Mini Bus Rental

While some financial decisions may seem innocents and justified, they may give mortgage lenders a reason to doubt your creditworthiness. Be sure to check with your bank before making any decision that could affect your credit score.