10 Things Not to Say to Your Mortgage Lender
If you are not too careful with the things you say to your mortgage lender, there’s a big possibility that you will compromise your loan application.
The process of mortgage loan application entails full financial background examination. You can expect to deal with piles of documents and be bombarded with tons of questions. To avoid jeopardizing the deal, take note of these 10 things you should never, ever say to your mortgage lender.
Telling untruthful things to your lender might put your approval at risk. This is not to mention that you can be charged with felony if you provide misleading information on your loan application. Stick to the truth, and you will be good to go.
2. I forgot to pay my bills.
Consistency is always key, and mentioning that you forgot to pay your bills might raise some concern. And while you might say a thing, these bills will still be part of your credit report, and you can get your loan denied.
3. What’s a credit score?
Your financial routine must include monitoring your credit score. When you have no idea what it is in the first place, your lender will deemed you as unprepared for the loan.
4. How much can I possibly borrow?
This is one question you should never ask. It only goes to show that you didn’t do your homework, making you sound completely uninformed. Lenders hope that you understand what comes with this kind of loan, but asking this question will make them see that you don’t.
5. My parents gave me a cash gift for the down payment.
While this is great, there are some existing rules when it comes to using cash gifts to qualify for loan programs. Discuss this with your lender first if you don’t want to get rejected because you overlooked this simple rule.
6. I got new credit cards!
It wouldn’t look too good for your lender when they know that you just added another debt. Before you make some big purchases for your new home, better wait until you finish buying the house itself.
7. I love changing jobs every year.
Although this is something you cannot control, it is always advisable to show stable employment. The most common requirement to get approved for a mortgage is a minimum of 2 years in a job.
8. Which of my credit cards isn’t maxed out?
Lenders wouldn’t want seeing significant increases in most of your credit balances. There’s no issue with small charges but not paying attention to your debt to income ratio might lead to rejection of your loan application.
9. I’d go for a commission-based job instead of a salary one.
You might find this gamble a good one, but your lender might not. Your existing employment status is important in the process of loan approval.
10. How does foreclosure work?
This last one is a major red flag. Inquiring about foreclosures is a clear sign that your lender should think twice. While it seems like a harmless curiosity, it only shows the lender that you have troubles in paying the monthly amount for your loan.