The Factors That Could Delay Your Mortgage Approval

The Factors That Could Delay Your Mortgage Approval

There's a massive amount of paperwork you have to send over when you apply for a mortgage. Before your loan is officially approved, one false move could stall the process and lead to even more paperwork. Credit.com points out a few factors that can hold up your approval.

Photo by Cameron Parkins

There are a few other events that can cause issues, Credit.com explains. Applying for another loan or line of credit may be a fairly obvious one, but there are a few other factors that can hold up the process, from large deposits to new sources of income. Here are a few tips they suggest:

Watch Your Spending: Now isn't the time to shop for new furniture or get a new car to match your new house. When lenders track your credit usage during the mortgage application process, balance increases can have a negative impact on your approval...

Don't Change Jobs & Maybe Even Stall a Promotion: New jobs, becoming self-employed or even a promotion that is a lower base but higher commission could all put your mortgage into jeopardy, Lewis said.

Keep Your Cash Deposits to a Minimum: You might think you need to fluff up your bank balances before applying for a mortgage. But, if you're going to do this, you probably don't want to use cash. Each of your large deposits needs a source and cash can be seen as too mysterious….

It can be a sensitive process, so it's worth knowing what triggers can set off your lenders.

6 Ways to Avoid Losing Your Mortgage After Pre-Approval [Credit.com]


Comments

    Bit of copy paste from the US. Is this advice even relevant to Straya?

      Yes and No. I use to be a Mortgage Broker and have some knowledge of this.

      Your credit history only shows if you have had any defaults over the last couple of years and what credit applications you have submitted. If you apply for a lot of new credit: credit cards, store cards, etc. it will show up and impact the calculation your lender uses to work out how much you can borrow.

      If you borrow more than 80% of the security value and need Lender's Mortgage Insurance, insurance that protects the lender in case you default, the LMI provider wants to see your deposit has come from genuine savings. they would like to see you save your deposit over 12 months rather than one big unexplained deposit. They figure if you saved the money you will be more committed to repaying the loan than if you were gifted the deposit.

      If your looking for mortgage, it's likely that you will need to have finished your probationary period if you have started a new new job .

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