Constantly since 2005, mortgage lenders have tightened its guidelines. Today, in comparison with recent history, it takes more income, more active and a better grade of credit for approved a home loan.
Having said that, it isn't surprising that they refused requests for mortgage of one in four in 2010, according to analysis conducted by the Wall Street Journal.
But the banks may not have all the blame.
Do the 5 errors more common than mortgage applicants
As a loan officer, that I have seen too many make mortgage applicants the same errors that always ensure their applications end up being denied.
Just some things you should never do while your home loan is "in-process." Here are the five most common mistakes I see mortgage applicants to do:
1. Do not go "autonomous" or leave their job
When a full time salaried employee, your lender is considered "safe". For this reason, you can get approved for a mortgage with only one day of W-2 job history. The lender knows that your next receipt of salary is around the corner and how much to pay.
For the self-employed, that guarantee is absent.
Lenders want to see the consistency of the income. Unless you have two years of the history on your own, you will not receive to use their income for purposes of characterization of mortgage in everything.
Also the self-employment net is wider than it seems. It includes not only the owners of the company. Self-employed includes entrepreneurs, people own more than 25 percent in an entity and W-2 employees whose salary is more than 25 percent of bonus or Commission.
So, while your loan is in the process, not resigned from his job, not start a new business and without any doubt, do not change from a salaried position to another Commissioner. Each could ruin his approval.
2. Not to finance a new car
Just because they are buying a home with a garage doesn't mean that you need to fill in (at least not immediately). Buying a car too soon is one of the most common mistakes that make homebuyers.
The problem is that most car loans monthly payments between $300 and $1,000. These are debts that did not exist at the time of your mortgage application. The new debt can push their relationship debt to income beyond the limit and cause your loan get rejected.
Also, be especially careful when your current car loan is 10 months remaining or less. For the purposes of rating on the mortgage account debt as well as $0; It is paid in total by the lenders.
If a swap and then take out a new loan, it will take into account the new payments against you.
3. Do not open new credit cards
It is the purchase of furniture and accessories, if it has not closed in his home, resist the ubiquitous call to "save 10 per cent by the opening of a credit card today". With each request for credit, your score is damaged traffic and add to its monthly debt obligations.
These two elements combine to threaten the approval of your mortgage. Sure, you can save 10 percent on the register, but will be a very small in comparison with possibly losing their dream home.
4. Don't forget to pay your invoices
Pay your bills on time will help to maintain its credit rating while your loan is in the process. Includes student loans, tax bills, mortgage loans, credit cards accepted - all. Even if the Bill is in dispute, make sure that you pay on time.
There will be enough time to discuss with their creditors, after closing his house. Until then, don't do anything that will damage your credit score or give rise to the collection.
5. Not to put its house in sale
If you are in the process of refinancing your home, it does not list for sale. Lenders not approved loans home if the underlying security (i.e., home) is "in" the market.
In fact, only a few selected banks will pay you if your home was in the past three months.
After approval, you are welcome to sell. It is his home, after all.
Bonus tip: get in advance often
A bonus tip: need to know that prior approval is finite. Expires as mortgage rates change. The amount for which may qualify for today will not be the same as what you can qualify for the future.
This is because the mortgages to change all the time.
Mortgages today, regardless of its price, an increase of 1 per cent of the mortgage decreases your maximum price in 10.75%. This is a huge reduction and a figure that buyers should ignore at their own risk.
Therefore, talk with your loan officer regularly. As mortgage changes, so does its approval.
Good luck.Dan Green (NMLS # 227607) is a director of Waterstone in Cincinnati, Ohio mortgage loans and the author of the blog mortgage recognized at the national level, TheMortgageReports.com. Follow on Twitter at @ mortgagereports. Constantly since 2005, the mortgage lenders have tightened its guidelines. Today, in comparison with recent history, it takes more income, more active and a better grade of credit for approved a home loan. Having said that, it isn't surprising that they refused requests for mortgage of one in four in 2010, according to analysis conducted by the Wall Street Journal. Do not allow these myths and misconceptions are a slice view of home ownership shock that home values have had in recent years were enough for permanent tenants of many people. However, stratagies of investment based on fear is going better than those based on optimism blind fortune cookie messages or lucky numbers. Many very knowledgeable people is buying houses again, and should at least take into account them. To commemorate the feast that marks the "birth" of this country and celebrates the ideals founders that make this country so great, that we wanted to take some time to consider whether the American dream of homeownership, despite all their current struggles, is still alive and well. Do exclusion rates soar, as ineffective counseling because of housing? It depends on who ask. Some experts--and even some studies - say advice helps new homeowners clarify a complex process. Others complain that do not measure the results of advisory and quality varies among agencies.