Applying for a mortgage is easier said than done. The process is often tedious, and there are a lot of things that can make it even more difficult. One of those things is saying something to your mortgage lender that can hurt your chances of getting approved. Keep in mind that the mortgage application involves in-depth scrutiny of your background. While it’s important to be honest with your lender, it’s also crucial that you don’t say anything that can ruin your chances of getting a mortgage.
Here are some of the things that you should never say or mention to your mortgage loan officer under any circumstances:
Anything that is not true
First and foremost, do not say anything untruthful to your mortgage lender. Lying in a mortgage application process can easily mess up your chances of getting approved. Not only is that a huge waste of time, but it can also lead you to legal trouble because giving misleading information on a mortgage application is considered a felony.
Be as honest as you can, but of course, don’t be too honest. It may be tempting to hide some information, but do not do that with the crucial parts of your application.
We need to do a lot of repairs before moving in
Do not say anything along the lines of “the house needs a lot of repairs before we can move in.” While mentioning this to your lender may not seem like a big deal, for them, it is. A home needing a lot of repairs is risky in a lender’s eyes. If those issues become greater and cause you to stop payments in the future, that is not a good situation for them.
If you do say this to your lender, they may ask for a lot more money to be escrowed for the repairs, or at the very least, ask a lot of questions that can make the application process even longer.
How much can I borrow?
“How much can I borrow?” “What is the most I can borrow?” These are the type of questions that make you look like an uninformed borrower, and lenders don’t like that. Before you even walk into a mortgage office, you should have a ballpark figure of how much money you can borrow based on your income. If you’re not sure, use this mortgage calculator to come up with an estimate.
I’m planning to change jobs / become self-employed
One of the most important things that lenders look for is income stability. Most lenders want their borrowers to be in the same company for at least two years to prove that you have a source of income stable enough to make the monthly payments. If you are planning to get another job or become self-employed after you buy the house, keep that to yourself. Sharing that information with your lender can raise some eyebrows and hurt your chances of getting approved.
More importantly, refrain from changing jobs in the middle of an application process. Even if the pay is higher, the stability that you have with your current job is more important in the eyes of a lender.
I applied for / opened up new credit cards
You may think that flexing your new credit cards makes you seem more financially able, but the opposite is quite true. The more credit lines you have, the higher your chances of getting into debt. And even if you are the most responsible credit card holder out there, your lender doesn’t know that, and you may come off as an irresponsible debtor.
If you did open up new credit cards, do not mention it. Moreover, do not make any big purchases until the application is approved. The lender may run another credit report right before closing. If they see tons of big purchases on your cards, they may deny your application.
Many homebuyers don’t realize that the things they say can also affect their chances of getting approved. Do yourself a favor and avoid making these mistakes. Before applying for a mortgage, be sure that you know what not to say to your mortgage lender.