Qualifying for a mortgage can be a challenging proposition for some borrowers. Lenders consider a wide range of factors when determining eligibility for mortgages. Here are five of the most common mistakes made by borrowers when seeking a mortgage in the financial marketplace.
Taking on New Debt
Most financial experts recommend that mortgage applicants avoid taking on new credit cards or loan arrangements during the lead-up to the process. New debt can complicate the calculations of the lender and may cause delays or denials for mortgage applicants.
Incurring Overdrafts and Insufficient Funds
Excessive overdraft and insufficient funds fees can serve as a warning sign for lenders that the borrower is less than responsible in his or her financial matters. This can add up to an unfavorable picture for the lending institution and a denial for the borrower.
Failing to File Income Tax Returns
Income tax returns are among the most common tools used by lenders to verify the financial means of mortgage applicants. Failing to file these documents in a timely fashion can add up to real trouble for borrowers and may result in significant delays in processing the mortgage paperwork. In some cases, borrowers may be denied outright due to their failure to file tax returns and documentation in a timely manner.
Failing to pay small medical or credit card bills can sometimes serve as a warning sign to banks and lending institutions that a borrower is not a good prospect for a mortgage arrangements. Most lenders will, at a minimum, require the borrower to pay off any outstanding charges and bills at the time of closing. Some will deny the application based on repeated failure to pay bills on time.
Changing Employment Status
Borrowers who move from one employer to another may experience minor delays or issues when seeking a mortgage. For those who move to self-employment from salaried or hourly positions, however, the lack of stability and security associated with this status may create roadblocks to acquiring a mortgage successfully.
At Acuity National Real Estate Solutions, we offer a full array of closing and title solutions designed to help lenders, borrowers and agents achieve their real estate goals. Give us a call at 502-238-7500 to discuss your situation with one of our expert representatives. We are ready to serve all your real estate title needs. Visit our homepage today!