Mortgage Application Mistakes That Delay Closings
Mortgage applications are often a stressful and time-consuming process that can determine whether you are able to secure your dream home. But what happens when your mortgage application gets delayed, causing you to miss out on your closing date? Unfortunately, there are many mistakes that can lead to these delays, and they can be easily avoided with some knowledge and preparation. In this article, we’ll be discussing the common mortgage application mistakes that delay closings and how you can avoid them to ensure a smooth home buying process.
Not Providing Accurate and Complete Information
One of the most common mistakes made during the mortgage application process is not providing accurate and complete information. This can range from forgetting to include all of your income sources to not disclosing all of your debts. Lenders rely heavily on the information provided by the borrower to determine their creditworthiness and ability to repay the loan. Any missing or incorrect information can result in a delay as the lender will need to request additional documentation or clarification.
To avoid this mistake, make sure to carefully review and double-check all of the information provided before submitting your application. It’s also important to be transparent and honest with your lender to avoid any delays or potential complications down the line.
Waiting Too Long to Gather Documentation
Another mistake that can delay your mortgage application is waiting too long to gather all of the necessary documentation. Lenders typically require a variety of documents, such as pay stubs, tax returns, bank statements, and more, to verify your financial standing. If you wait until the last minute to gather these documents, you run the risk of missing important deadlines and causing delays in the application process.
To avoid this, it’s best to start compiling your documents as soon as you decide to apply for a mortgage. This will give you enough time to request any missing documents and ensure that all of your financial information is up to date and accurate.
Applying for New Credit
When you apply for a mortgage, your lender will conduct a credit check to assess your creditworthiness. Any changes to your credit during the application process can delay your closing as the lender will need to review your credit again. Applying for new credit, such as a car loan or credit card, can also affect your debt-to-income ratio, which is an important factor in mortgage applications.
It’s best to avoid applying for any new credit until after your mortgage has been approved and the closing process is complete. This will ensure that your credit stays consistent and doesn’t affect your mortgage application.
Making Large Purchases
Along with applying for new credit, making large purchases during the mortgage application process can also cause delays. Lenders are looking at your debt-to-income ratio and any large purchases, such as a new car or furniture, can negatively impact this ratio and raise concerns about your ability to repay the loan.
If possible, it’s best to hold off on any large purchases until after your mortgage has been approved and the closing process is complete. This will help to streamline the application process and avoid any potential delays.
Not Responding to Lender Requests Promptly
Throughout the mortgage application process, your lender may request additional information or documentation. It’s crucial to respond to these requests promptly to avoid any delays. Failing to respond in a timely manner can result in the lender needing to extend their review process, which can push back your closing date.
To avoid this, make sure to regularly check your email and respond to any lender requests as soon as possible. If you’re unable to provide the requested information immediately, be sure to communicate with your lender and provide a timeline for when they can expect the documents.
Conclusion
Mortgage application mistakes can be costly and cause unnecessary delays in the home buying process. By avoiding these common mistakes and staying organized and proactive throughout the application process, you can help ensure a timely and smooth closing. Remember to carefully review all of your information, gather documentation in advance, avoid making major financial changes, and respond promptly to lender requests. With these tips in mind, you’ll be one step closer to securing your dream home without any delays.
