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5 Common Mistakes when Completing a Mortgage Loan Application


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TERMINOLOGY

Mortgage loan applications are quite simple if you are prepared with the knowledge of what to expect when you go to the bank or loan lender. Applying for a mortgage is a huge financial decision, so it's necessary to be knowledgeable about which offer is right for you and how it can ultimately help you financially. This task may seem daunting at first, since there are certain qualifications that a buyer must meet in order to qualify for available loans. Buyers can make many mistakes while trying to qualify. This article will help you avoid those mistakes and help move your loan application process along smoothly.

1. Moving Money Around

During the loan application process, your loan experts will have to confirm your income and assets listed on the application you have submitted. Moving these funds can create confusion and ultimately result in a huge headache, indefinitely slowing the process down. The best thing for you to do is to simply leave everything where it was when you initially began the process, and if you really have to change anything, always discuss it with your mortgage loan officer prior to changing it so that the lender is fully aware of the situation.

2. Not Documenting Large Deposits

Your loan officer will need to approve all sources of money for the transaction. This includes all large deposits into both checking and savings accounts. Be prepared to document everything. Keep records of everything. Keep, for example, a copy of a paycheck. Sometimes you may come into a large quantity of money if you sell something extremely valuable, such as a collection of antiques or a car. Save everything that is involved with those transactions. In fact, you should even make copies of these documents and store them somewhere else just to be safe. As always, keep your loan officer informed.

3. Not Documenting Gifts

Large cash gifts from others are very common when you are beginning the process of purchasing a home. People who care about you may want to help you out during this time. If you are expecting to receive any sort of cash gift toward the financing of the home you're trying to buy, make sure you let your loan officer know.

4. Causing Changes to Credit Report

Avoid any new sources of credit because they will change your credit report. If you're planning to pay off major credit card debt before closing, wait until after you've spoken to your loan officer. Listen to what the loan officer has to say about whether you should move along with your plans involving credit. You don't want to throw the lender off because you want this process to move along as smoothly as possible for you. Incidentally, you may also want to review previous credit reports.

5. Not Keeping Financial Statements Organized

This is ultimately the most important thing to keep in mind. Keep track of any and all bank statements and financial papers, storing them in a convenient place. You may want to keep a binder with different folders for each category to stay neat and organized, so that you can easily find any information you need.

In Summary

No matter what you do, make sure you speak with your mortgage loan officer first. Things that you may not consider a big deal could actually make a big difference in settling smoothly.