5 Deadly Mortgage Application Mistakes | RealtyPin.com
NEW YORK, Jan. 29, 2013 /PRNewswire-iReach/ -- 5 Ways to Kill Your Mortgage Application - Want to spend 2013 in the new home of your dreams? You'll have to qualify for a mortgage first! And, as the real estate experts on Realtypin.com point out, banks have really tightened their lending standards ever since the housing bubble burst. So, the last thing you can afford to do is make any mistakes that will inadvertently kill your mortgage application – like:
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1. Not checking your credit report first
Even if you've always been really careful and really responsible when it comes to your debts, you never know what could be lurking on your credit report. After all, it's entirely possible that the credit bureaus made a mistake somewhere along the line and are penalizing you for something that isn't your fault. (This is actually a problem that's more common than you think!) So, before you even fill out your mortgage application, you've got to go over your credit report with a fine-toothed comb. If there are any mistakes, better you find them than an underwriter at your mortgage company!
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2. Cancelling a whole bunch of credit cards
You might think this makes you look good. After all, you're taking the temptation of over-spending away, right?! Unfortunately, though, when you decrease your amount of available credit, it can lower your credit score. And, when your credit score gets lowered, it sends up a red flag to mortgage lenders.
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3. Putting a bunch of purchases on one credit card
You might think you're doing yourself a favor by only using one credit card, instead of a whole bunch. However, mortgage lenders don't see it that way. In fact, they don't like to see you go beyond 50% of your available credit card limit. If you really want to be safe, don't exceed 30% of your credit card's limit. As a result, that idea you had to consolidate all of your credit card balances onto one card and pay off your debt in one chunk is going to have to wait until after you sign on the dotted line for your mortgage!
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4. Not having any money to put down
No matter how great your credit score is, how high your paychecks are, and how responsible you seem to be, if you don't have at least 5 or 10% to put down (and these days, closer to 20% if you don't want to be saddled with private mortgage insurance), forget about qualifying for a mortgage.
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