It’s everyone’s biggest fear, you find the perfect house but now you need to secure financing. Will you qualify? What could impact your mortgage approval before closing?
Here are 5 reasons why you might not qualify for a mortgage or risk losing your mortgage approval before the closing day:
- Limited credit history – Ideally you want to have 2 open trade lines ( credit cards/ personal lines of credit/ loans) for 2 years with a clean repayment history.
- New Job – Are you guaranteed hours? Are you on a contract, seasonal, or maybe even temporary? Unless we can show guaranteed hours or 2-year history of your ability to earn a certain income we might not be able to count your income towards qualifying.
- Opened a new loan – Did the local car dealership lure you in with the employee pricing sale they have going on? Taking on any new financing, prior to closing, could put your mortgage in jeopardy. The lender is allowed to reconfirm your credit bureau right up until the day of closing.
- Missing down payment – Thought you’d have enough time to save up the rest of your down payment before closing but are coming up short? Lenders will need to see your down payment, all of it, in your account before closing. They’ll also need to verify it came from the sources you disclosed, meaning you can’t just suddenly decide to use your line of credit for your down payment if the lender doesn’t approve.
- Not disclosing all pertinent information upfront – Your file will be reviewed by your mortgage professional, the lender, potentially the default insurer, and the lender’s compliance department. That is a lot of hands reviewing your file to ensure everything is above board. Make sure you discuss anything that could jeopardize your financing upfront. This includes all properties owned, all financing and debt, any issues with credit in the past, and your source of down payment, just to name a few.
Think of your mortgage professional as your ally. The right person will be on your side and help prepare you for any of the above issues, and discuss their potential impact should any of the above occur. Sometimes it’s a simple fix, sometimes it can require re-configuring your mortgage approval. A professional like myself is always thinking ahead on how best to protect you during your home buying experience.
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Ready to start your mortgage process? Apply here
Michelle Letourneau | Mortgage Alliance
Mortgage Agent
(613) 701-0518
info@michellemortgages.com
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