Purchasing a house is a big decision that you should seriously give a thought. And if you don’t do your homework and work with a dependable mortgage broker Toronto, you will have to deal with more challenges than you would otherwise. To avoid the pitfalls in the mortgage application process, you will to avoid the following mistakes that many applicants make.
Failing to Check the Credit First
Before you visit mortgage lenders, make sure you know where your credit lies. You don’t want to be shocked at things in your credit report when your lender already has it. Ensure that you have paid all your dues and that your report does not display entries that could make you a less-worthy borrower. Keep in mind that lenders will go through your credit report and decide based on your creditworthiness. So it is important to check your credit well before starting to hunt for a house and have an impressive credit report. Ensure you dispute errors on the report or work to increase your credit score if your score is low.
Opening New Lines of Credit
Whether you are applying for a first or second mortgage, expect that lenders to do a serious background check on your credit and financial status. You don’t want your credit score to drop because you applied for a new credit card or store card. When it comes to credit, it is important to watch where you step. What you should do instead is to continue to do what you have been doing and make sure you pay your dues on time.
Getting More Loan that you Can Afford to Pay
Apart from the money that you will need to buy your dream house, the buying process incurs other expenses. Because of this, you will want to ensure that you can afford to pay them all. Getting more loan than what you can afford to pay off may have you facing the possibility of selling your home before you event pay off the mortgage loan because you cannot make the payments.
Rushing your Choice of Mortgage Lender
You can’t get the best lender if you go for the first lender you find. Because lenders will want to get your business, they will give you varying offers. For instance, some lenders will offer to give you back $1,000 at closing. Shopping around helps you find the right lender who will give you the most benefits. To help you make the right choice, ask somebody you know if they had a positive experience with a lender. Try to check in with two or three lenders to know what is out there.
Failing to Get Pre-Approved
To get pre-approved, you need to go through the mortgage application process. This allows you to know how much home a lender believes you can afford and provides you realistic specifics to work with such as lowest mortgage rates while you are searching for a home. Also, getting pre-approved tells the seller that you are a serious buyer.