Three Things to NEVER Do When Trying to Secure a Home Loan

When trying to qualify for a home mortgage, you have to jump through a lot of hoops. Running down records can be time consuming and frustrating.. But lenders want to be sure when they invest their money on you that you are a good investment.

The last thing you want to do is derail your chances of obtaining a loan by altering your financial standing. Here at First National Title Company, we’ve helped hundreds of Arkansans walk through the doors of their new home, and we want to help you too.

So, we’ve compiled a list of three things that could possibly delay your closing at best, but may possibly derail the closing altogether:

1. New Credit Card or Car Loan – Take one of these out after the loan application process has begun and you may find that your prospective lender has newly developed concerns about your loan application. Obtaining a new credit card or a car loan during this juncture is called “changing your borrower circumstances, and after the financial meltdown in 2009, lenders are watching these issues like a hawk, and most will run one last credit check right before closing.
2. Run Up Credit Card Balances – In the time it takes to close a loan you are well advised to leave the credit cards in your pocket. If you run up the balances, that will change your debt to income ratio, which is a big factor in the process. If your minimum payments take more than a certain percentage of your income to satisfy, then you could be considered a bad credit risk. You can count on your debt to income ratio being checked.
3. Change Jobs or Job Circumstances – Generally speaking, at least a two-year job history is the boundary line for lenders. Less than that and you could be considered a bad credit risk. Even taking a different position that alters how your compensation is figured; for instance transferring from a salaried position to one that pays commission, may make lenders nervous about your loan application.

Once you’ve applied to a lender, your best move is to do nothing to change your financial picture.

Call First National Title Company at one of our offices listed below or contact us online for the best in professional real estate closing and title services. FNTC is independent, locally owned and operated, with the ability to close your transaction quickly and efficiently. And, because we’re not owned by a real estate company or lender, you can be certain we’re working for you.