After spending years after years in a shabby little apartment, the time has finally come to take the final step. You are ready to mark success by invest in your dream house. Having saved a few bucks for this goal, you are still drowning under the tight budget. Instead of putting the plan off for months, you can opt for a loan program. Since homeownership has been a big commitment, it brings a truckload work along with it. Needless to say, they end up making certain mistakes while applying for the loan.
The basic problem starts with not gathering enough information. When you have found a home, you need to choose an FHA mortgage. The first-time buyers generally end blowing their chances. That’s why; the best FHA lenders have come forward to walk customers like you in the midst of financial woes. One wrong move can put you into trouble and you may get rejected in the end. So, why dare take the risk?
According to professional lenders, here are a few mistakes mentioned. Take a look.
Not Paying Bills on Time
The lenders always notice that first-time buyers have a rocky financial status. Undoubtedly, this leads to poor credit score which is another obstacle in the loan process. One of the reasons why your credit score is dropping is due to missed bill payments. Whether it is tax bill, credit card bill, or student loan – if you miss the bill payment, you will suffer. It is better to pay the bills on time. That’s why; the lenders suggest that you should deter from damaging credit further.
Not Preparing in Advance
The whole process of applying for an FHA loan requires lots of paperwork. Generally, the lenders ask for bank statements, W2’s, and tax returns. It is important to show proof of a 3-month bank statement. The professionals need to understand your capability of paying back the loan. Hence, the paperwork proves how you are preparing for the down payment.
Not Recording Large Deposits
The loan authority checks every source of income and the large deposits are never excluded. Additionally, they consider saving and checking accounts. It is necessary to document every deposit even if it is a large cash gift. You must have copy of everything including the paychecks. For example, when you are selling your car or an antique piece, you may be left with a large amount of money. That’s why; you should save everything related to the transactions and store them. In any case, keep the loan officer informed.
Not Getting Pre-Approval
Many times the professionals come across people who have zero knowledge of loan pre-approval. It is quite natural when first-time users are involved. Once you get pre-approved for an FHA loan, the property seller will understand how serious you are about buying. On top of it, you can miss the window when you do not have pre-approval.
There are other things that are out of your knowledge and you may end up making the common mistakes. Hence, resort to the home mortgage officers as they are always prepared to help you with pre-approval or poor credit score.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.