What Mistakes Not To Make

Posted at 4:15 AM, Mar. 24, 2008

If you are shopping for a mortgage loan, take head and not make these mistakes that could halt approval from a lender.

1.  Disregarding Your Credit Reports.  This is critical.  Find out your FICO score and make any and all necessary repairs to improve it.  You will pay dearly if you overlook this component.

2.  Overborrowing.  Just because a creditor will give you a limit of $25,000 doesn't mean you should take it.  This is a credit card example, but frankly, applies to your home loan as well.  Don't take buying a new home as an opportunity to furniture shop as well, namely if you are doing it on credit.

3.  Changing Your Job.  This is not the time to find your passion in life.

4.  Cutting Down on Credit Cards.  Paying down your credit card debt is important, but closing accounts when you are establishing mortgage worthiness is a no-no, especially if it is cards that have a long history with you.

5.  Moving Your Money.  While you are shopping for a loan, don't decide you are unhappy with your current bank.  Keep your money seasoned and in place until after you have closed on your new home.