Applying for and securing a mortgage is not as simple as filling out an application, being approves and getting funds for a home.  The mortgage process is complex and a time consuming process.  Preparation is the key element for one of the most significant events of your life; securing a mortgage to secure your American dream.  Here are some pitfalls to be aware of and to avoid when applying for a mortgage for your new home or refinancing an old home.

Not Checking Your Credit Report

Long before you think of actually buying a home you need to know where you stand with your credit report.  A bad credit score will increase your mortgage rate so it is important that this step is taken long before you are actually thinking of applying for a mortgage.  Take steps to fix inaccuracies within the report with each of the three different credit bureaus.  This process can take several months.  It is important to step up and take control of your credit rankings.

Applying For More Credit While Applying For a Mortgage

 Don’t apply for more credit while you are looking to secure a mortgage.  Put off buying a new car or opening any credit cards in the months before and during your home loan search.  The more credit you look like you are trying to secure the higher the greater the credit risk you appear to be.  If you do apply for credit during this process be prepared for the backlash.

Failure to Look At the Total Housing Amount

A common mistake that is made when applying for a mortgage is the failure to look at the total picture.  Not only do you need to consider the mortgage payment but also the interest, the taxes and the insurance.  Also it is important to take into the consideration the amount that your household bills will increase.  Look at your debt to income ratio.  Make sure that you are comfortable with the amount of money coming in verse coming out.  Are you still going to be able to be comfortable with the payment on the home considering all the extra costs that are incurred with homeownership?

Not Seasoning Assets

Another aspect people often forget is that mortgage lenders are looking to see what type of assets are behind the payment.  Having assets in the bank, back up funds is important when trying to secure a mortgage.

Job Hopping

Starting a new job when applying for a new mortgage is not the end all of end alls however showing a steady source of employment and income needs to be accomplished.  Getting a new job in the same field may not be a problem but changing careers all together may be a deal breaker, especially if looking to become self employed.

Not Getting Pre-Approved

If you don’t secure pre-approval you may end up falling in love with a home that is out of your reach.  You never want to start looking for a home without first being pre-approved.  An experienced real estate agent will guide you in this process so that you have a basic understanding of a price point to consider.  It is crucial to remember that just because you are approved for a certain amount doesn’t mean you have to purchase a home at the highest point of pre-approval.  You may not feel comfortable with making that payment along with keeping up with your current lifestyle.

Whether you are buying a home or refinancing an existing mortgage take your time to find a home loan that works best for you.  Find a lender or mortgage broker that will help you through the process making it as easy as possible for you to secure the best possible mortgage.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at