Common Mistakes People Make With Paperwork When Buying A House
Buying a house is a significant transaction that usually requires financial backing in the form of a mortgage. However, to acquire a mortgage, you need to prove your ability to repay the money you borrow. For this, you must provide certain documents that state and support your financial capacity. In addition to this, you must also refrain from certain activities that could alter your financial health.
Unfortunately, as a first-time homebuyer, you may be unaware of what steps to avoid. This can cause you to make mistakes that not only prove to be costly but could prevent you from acquiring a mortgage altogether. To help you make smart decisions and keep away from errors while applying for a mortgage, The Mortgage Girl has explained below three common mistakes people make with paperwork when buying a house.
1. Providing down payment documents with no ownership
The amount you’re willing to chip in to cover the purchase price of a house is referred to as a down payment. It is a vital aspect when acquiring a mortgage as the amount you’re willing to pay on your own affects the rate, monthly payment, term, and conditions of your mortgage. To prove you’re capable of paying the down payment amount you quote, you need to provide documentation that proves you have the amount. This amount can be in the form of savings, a gift from a relative, or even a loan. The lender will request ownership of the account statements showing the source and origin of your down payment. If no ownership is shown the lender will not accept the paperwork. Please also note that any large deposits must have proof of source and origin of the money. This may require additional bank or investment statements. If you have questions, please ask for some insight.
2. Applying for new credit before possession of your new home
Besides applying for a mortgage, avoid taking on any other forms of credit until you obtain possession of your new home. Additional credit applications will result in changes to your credit score and capacity to pay your mortgage. This can cause your mortgage lender to deny you a mortgage or change the terms of your contract.
3. Not providing correct documents
Before submitting your documents to your mortgage broker or lender, make sure you provide them with all of the latest and most accurate information. To avoid mistakes or incomplete submissions, you can ask your lender or broker for a list of the documents required and then collect the necessary paperwork accordingly. When handing over these documents, you can cross-check with your list to see if you have everything you need. Lenders are very specific in what they want to see for paperwork. They will not sign off until they have everything they are looking for. Ensure you have everything required as the mortgage lender requests.
To avoid other mistakes like these when buying a house, reach out to The Mortgage Girl. I am a mortgage broker in Edmonton, AB, and I am known for my expert advice and ability to acquire the best mortgage rates. I have over three decades of experience in this industry, which has allowed me to build a broad network of lenders. While I am associated with different lenders, I am not tied to any of them, which means I do not work for them. My sole focus is you, the client, and your requirements.