There are a lot of moving parts when you buy a home. Before you start looking with your realtor, you have to get a price range & pre-approval sorted out with your mortgage broker. Then once that’s all sorted & you’ve found a home, your money needs to be freed up & ready for the deposit, so you might need to speak with your financial adviser or tax adviser, or your family members if any of that down payment money is coming as a gift. Then, before closing you need to sort out your life insurance & your home insurance, and in the midst of getting ready for & coordinating that big move, you have to go in to see your lawyer/notary to sign a small tree’s worth of documents at some point before closing.
The last thing you need on your plate is any hiccups in the mortgage process. Here are the 5 most common mistakes that delay the mortgage process:
- Not sharing changes to the offer price with your lender
If issues come up in the home inspection that the seller drops the purchase price to account for, you need to let your lender know right away. Depending on what the issue is, the lender may need to have it rectified prior to you taking possession. If the bank doesn’t find out about this until they get a copy of the purchase contract from your lawyer a few days before possession, you could put yourself in a real pinch with only a short time until closing.
- Confusing approval with pre-approval
Nowadays, a pre-approval really just gives you a rate hold & a price range. Lenders don’t fully underwrite pre-approval submissions so it’s vital that you get an approval in writing prior to you removing your financing condition & committing to buy the property. Banks need to look at the whole picture, which includes your financial details AND the property details.
- Not disclosing where your down payment money is coming from
If a portion of your down payment is coming from a family member, or from a line of credit, let your mortgage broker know early on. It’s not uncommon for a client to say down payment is coming from their resources & then we find out that isn’t the case once we start collecting down payment documentation. Lenders want to know about this up front otherwise they will have to go back & get the file re-approved. In some cases, this could even put your approval in jeopardy.
- Not sharing details of your income or employment
If you recently changed your compensation plan (from salary to commission, or vice versa) or plan to change your employment, tell us right away. Lenders have the right to call your employer at any time before closing to verify your employment details & if something like that comes up late in the game, again, it can jeopardize your approval.
- Not providing all the required documentation
When you get a mortgage, the lender will need to see confirmation of certain details in your application (income, down payment, debts, etc). When I pre-approve my clients, they get a list of what documents will be required for mortgage approval. To make the transaction as smooth as possible, send those in right away. If the lender can get all of those documents up front, you can take a lot of stress & scrambling out of the picture.
Buying a come can be stressful enough. The last thing you need is fuel to that fire so make sure you are upfront with your team of professionals & on the ball in terms of getting them what they need early on.
If you would like to know more about how to ensure a smooth home buying process, contact me at [email protected].