At Altius Mortgage Ogden, we’ve seen every possible mistake within the mortgage loan process. We know exactly how to steer you clear of some of the biggest pitfalls in the industry and help you get the best mortgage rates possible.
One thing we’ve noticed over the years as a primary mortgage broker for the Ogden area? Most mistakes in this industry come well before any application is submitted. Let’s look at some of the bad habits that could get you into trouble down the line if you’re looking for a mortgage.
Credit Score and Bill Payment
Credit score might be the largest single factor in which kinds of mortgages you’ll be approved for and what kind of rates you can expect, so keeping it high is vital. Check it at least six months in advance, if not further – this is how long you’ll need to take the proper steps to improve it, if needed.
A big factor in credit score is basic bill payment. Falling behind on bills is one of the quickest ways to lower the FICO credit score, probably the most common tracking format. Late payments on your financial record indicate to lenders that late payments are coming for a mortgage, too.
There are several specific negative events that you should try to avoid within six months or a year before applying for mortgages:
• Closing a credit card: One of the most important factors in credit is debt-to-credit ratio – how much debt you have compared to how much credit you have left over. Closing a credit card removes some of your available credit without removing any debt, so this ratio is negatively impacted.
• Major purchase: If you make a big purchase and have limited cash in hand, you could be turned town.
• Major deposits: Any major bank deposits that are outside the norm within a few months of a mortgage application will raise red flags. Lenders may assume this was money gifted or loaned privately, and not real income you can count on permanently.
• Job change: This indicates lack of stability.
• Marrying into bad credit: Credit scores are accounted for jointly if you’re married.
Major debt is another big no-no before a mortgage application. Another important ratio is debt-to-income, for which the threshold is right around 43 percent – meaning if your debt ratio is higher, you might be declined for many of the most attractive loans.
Want to learn more about the factors involved in mortgage applications, or any of our other services? Speak to the brokers at Altius Mortgage Ogden today.