Two Mortgage No-No’s

So you have your mortgage pre-approval or approval and you think you have a guarantee from the bank for your financing….Wrong! Most people do not realize nothing is guaranteed when it comes to mortgages and the piece of paper you have in your hand is nothing more than an outline of what the bank is willing to offer.

There are a few mistakes some home buyers make that can put their financing in jeopardy:

1. Shop around your mortgage or accumulate other debt. I have said it a million times, but one of the most damaging things you can do to your credit is have too many people look at your report. This raises a red flag for the lenders and gets you labeled as a “Credit Shopper”…..someone who is trying to accumulate as much credit as they can. Even if you were just looking for ONE cell phone contract, but went to 4 different providers, it still is very damaging. I have had clients who have been pre-approved, but then could not get approved because they went shopping for credit.

2. Make a major change to your employment situation. Try and plan any major career moves around your mortgage. Don’t get approved for your mortgage and then decide to quit your job a week later. If the lender finds out they can refuse to fund the mortgage. Normally if you are switching to a new company, but are in the same line of work the lender will understand, but technically you need to be past your 3 month probation before they feel comfortable lending you the money. Where most people tend to get into trouble is when they quit their job to become self employed or an independent contractor. You might be in the same industry, but you do not have a history of being self employed and this scares the lender.

The moral of the story is try to keep your employment and your financial situation constant until the mortgage closes. Of course there will be circumstances where this is not possible so speak to your mortgage broker about the best way to package the news for the lender. It could mean the difference between getting the mortgage or not

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