1. Buying a New Car.
The purchase of a new car increases your debt, changing your debt-to-income ratio. Your debt-to-income ratio is a large contributing factor in the loan approval process. The bank wants to make sure that you will be able to make your mortgage payments. Lending money is a risk and the bank wants to do everything they can to minimize that risk.
2. Quitting or Changing Jobs.
Steady income is important for any new home buyer. Your mortgage lender needs to know that you have enough money coming in to make your mortgage payments on top of your other monthly bills. You definitely do not want to switch from a salaried position to a heavily-commissioned job. Lenders want employment stability and favor applicants that stay in the same industry.
3. Making Large, Random, Undocumented Deposits.
The federal government, banks and lenders get really nervous when they see large sums of cash being deposited, especially just before applying for a mortgage. If a relative or someone gives you a large cash gift, be sure to fill out the proper paperwork to justify that income. The same goes for transferring large sums of money between bank accounts. While often times you have a legitimate reason for the deposit, it will raise questions. If you need to make large deposits or transfers during the home buying process, be prepared to answer a lot of questions and provide documentation as well.
4. Forgetting to Pay Your Bills.
Not paying your bills on time or even at all doesn't look good. Any signs that show you might not be able to pay your mortgage has you on your way to being unapproved. Failing to pay your bills also puts your credit score in jeopardy. Collection accounts have a negative impact on your credit standing, even after you pay the debt. While making on-time payments won't directly improve your credit score, not making them can get you into trouble.
5. Opening or Closing Credit Cards.
Your credit report is another high contributing factor in getting a home loan at the Lake of the Ozarks. Too many credit inquiries over a relatively short period of time are never a good thing for your credit score. Your mortgage lender will actually view any unused lines of credit more similar to unsecured "loans." Beware of those tempting deals to save 10% or more at your favorite department store by opening up a line of credit through them. You also don't want to close any accounts. While it seems like a smart idea to close accounts that you don't use, you can actually increase your debt-to-credit limit ratio. If you have balances, your percentage of credit "utilization" is going to increase. This is very bad from a lender's perspective.
The loan process takes time, time where you could easily make one of these mistakes. Remember that your mortgage lender at the Lake of the Ozarks will verify your employment and your credit report just before closing. If there has been a change, there is a possibility that you will no longer qualify for a Lake of the Ozarks mortgage loan. If you have any other questions regarding the loan approval process, contact Lakelender Michael Lasson at 573-746-7211.
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Sr. Residential Mortgage Lender
NMLS #: 493712
2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049
Direct: (573) 746-7211
Cell: (573) 216-7258
Fax:(573) 693-9141
Email: mlasson@fsbfinancial.com
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
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