The home buying process is complicated and involved, but if followed correctly, can be seamless for you. Just beware of the 6 mortgage loan roadblocks that can appear when closing on your home and how to avoid getting stuck.
Common Mortgage Loan Roadblocks
Buying a Costly Item
Buying a big ticket item is one of the most common mortgage roadblocks for home buyers. When you’re in the process of buying a home, it’s important that you do not buy other big ticket items at the same time. These items can include but aren’t limited to a new car, a boat, expensive furniture, or electronics. Buying these costly items can dramatically slow down or even terminate your home loan. If it’s necessary to buy one of these items, talk with your lender and they can walk you through the proper steps to proceed.
By quitting or switching jobs in the middle of the home buying process, you’re putting yourself at risk of terminating your mortgage loan. Your lender wants to see that you have a steady work history and that your income is consistent. The main reason your lender wants to see you stay in your job is so they can properly assess if you’re able to pay a mortgage each month, on time and in full.
Pay Bills Late
Payment history is the largest chunk of your credit score, so if you start to pay bills late, your credit score will drop therefore slowing down your mortgage loan. Your lender uses your credit score to assess if you qualify for a mortgage loan, and if so, the best program for you. If your credit score dramatically changes during the home loan process, it can lead to a termination of your loan.
Change Bank Accounts
Another one of the most common mortgage loan roadblocks is changing bank accounts during the home buying process. Submitting documentation that verifies your bank and bank history is a large resource for your lender to assess your loan qualification. If you change banks in the middle of the process, you will need to re-submit all of the paperwork again, and fill out additional forms stating the reason you switched banks.
Make Large Bank Deposits Other Than Paycheck
Every large sum of money that flows into your bank account while you are in the home loan process, will warrant a letter that indicates the reason behind the deposit. Try to limit the deposits that flow into your account as it slows down the mortgage loan process. An exception is if you are receiving gift funds from a family member. You’ll still need to provide documentation, but it’s a common home buying occurrence.
Ignoring Questions From Your Lender
Part of what makes getting a mortgage loan seamless is quick responses from both sides. If your lender has requested more documentation from you or just needs a simple answer to a question, it’s important that you reply quickly. The longer you wait to respond the longer it will take for your mortgage loan to close. Because of this, it’s ideal for you to avoid taking trips the week before you close, in case your lender needs any last minute paperwork.
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