Obtaining a home mortgage can sometimes get tricky and it is possible to unknowingly self-sabotage your chances of your loan getting approved. There are many financial factors that go into qualifying a borrower for their loan amount and rate. If you plan on making any big changes involving your finances, first consult with your loan officer to prevent your loan from being denied. Follow these five rules-of-thumb to avoid making some classic application mistakes.

5 THINGS TO AVOID DURING THE MORTGAGE PROCESS:

1. Switching jobs.  While hopping from job to job may not sound harmful, if you are trying to obtain a mortgage, you should be conscious about which jobs you accept. Mortgage lenders look for two years of job stability when approving loans, as a steady paycheck reflects a reliable income to pay off the mortgage. Maintaining jobs within the same company or industry will be critical to qualifying you for your home loan.
   
   
2. Making late payments. Maintaining a great credit score is critical for qualifying for a good rate. When you make a late payment to your credit card or any revolving debt, you are directly damaging your credit report. A single late payment can lower your credit score by up to 50 points, which could potentially ruin your chances of getting your loan approved. Make sure you pay your bills fully and on time each month. You can also set up an auto bill pay and let it do the work for you!
   
   
3. Making large purchases. Wait until your loan closes before you take on more debt. Taking on new revolving debt, such as a car lease and financing a brand-new Peloton, increases the debt factor of your debt-to-income ratio, potentially decreasing the loan amount you qualify for. Don’t be fooled, co-signing a loan for someone else falls under this category as well! Additionally, these purchases create new credit inquiries, which in turn can lower your overall credit score.
   
   
4. Maxing out your credit. Hitting the limit on multiple lines of credit raises your debt-to-income ratio, meaning the amount of debt you now have compared to your income has increased. This tells your lender that you may not have extra cash to afford your monthly mortgage payments, in addition to standard life expenses. Aim to keep your balances under 30% of your credit limit to avoid running into this issue.
   
   
5. Not saving money. Although there are mortgage programs that don’t require a large down-payment, having cash in the bank gives you some cushion room in case of an unexpected financial emergency.

Don’t ruin your dream of homeownership! Educate yourself before making a mistake that could ruin your chances of a loan approval. Please do not hesitate to reach out to us - our team is here to answer any questions you have along the way. Let us help make this a simple and seamless process for you.

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This information is provided for convenience only, and Family First Funding LLC and its affiliates (“FFF”) make no warranties concerning the accuracy or completeness of any of the information. Information is subject to change without notice, and FFF is under no obligation to provide updated information. This is not financial, tax, compliance or legal advice and should not be taken or relied upon as such. Each individual should consult with his/her financial, tax, compliance or legal professional. Mention of product, process or service shall not be construed as an endorsement or recommendation by FFF.