Getting married? Relocating? Maybe you’re retiring and downsizing. Whatever the case, life’s transitions often accompany the purchase of a new home. But qualifying for a mortgage in these tough times isn’t as easy as it was a few years ago. Today, I’ll give you some advice on what pitfalls to avoid when applying for a mortgage.
If you need a mortgage, now is not the time to rack up credit card debt. I know, I know… you’re getting married and you need to pay the caterer and you need to pay for the cake and your tux and the photographer. But don’t drive up your credit card balances while trying to qualify for a mortgage. Either wait until you’re all moved in and you’re happily living in your new home to rent that tux and buy that cake – or, better yet, wait until after you’re married to buy the new house. It’s easier to qualify for a mortgage when you have two incomes to help pay the mortgage. And most certainly, don’t open up new lines of credit while you’re still in the mortgage approval stage. Pre-approval is one thing. Approval is another. Especially if you get pre-approved and then you use your credit cards for expensive toys – or worse – you open up a new line of credit for a new car before you’ve been approved for a mortgage… well, you can almost guarantee that you won’t get approved for your home loan. It’s not worth it. Wait to buy the car until after the closing.
Speaking of life’s transitions… if you’re considering looking for a new job, buy the house first! Longevity at your place of employment means more to a lender than a new job, even if the new job pays better. (One caveat, if you are changing jobs but are staying in the same line of work, with no decrease in pay and no gap in your employment history, this usually won’t cause an adverse effect on your ability to qualify for a mortgage.) Retirees, take heed. Get the mortgage and then retire. It’ll be easier to qualify for a mortgage while your employed. Of course there are exceptions to this rule of thumb. It would be prudent to call us prior to your retirement so that we can advise on your best course of action.
Regardless of whether you’re entering into one of life’s transitions, if you want to qualify for a mortgage, be sure to check your credit and do what you can to improve it before you apply for your mortgage. Learn more about credit by visiting our About Credit page and our How to Improve Your Credit page. Of course, you can always call us at 877-451-3100 or use our Contact Us page to inquire about our low interest rates. We’ll review your needs, discuss the transitions that you’re going through and tell you your best options to help you qualify for your home loan.
– Bruce Lublin, President
Homerica Mortgage Corporation – Your first choice for mortgages in New York and Connecticut
