what should you not say to a mortgage lender

Lenders want to know that you can afford the property when you purchase a home and obtain a mortgage.

Because of this, there are certain important things you should never discuss with your mortgage lender during the home loan application process as they might raise issues that could make it more difficult for you to get approved for a loan.

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“I’m still figuring out where my down payment money is coming from.”

Lenders need proof that you have the money for a down payment. Sometimes, rather than coming from a gift or other loan, a portion of this money needs to come from your own resources.

You will usually not be approved for a home loan if you tell the lender that you do not currently have the funds for a down payment or if you are unable to produce bank statements as proof that you do have the funds. To avoid this problem, make sure you can meet the lenders minimum down payment requirements.

Some lenders allow you to borrow money with as little as 3% down payment, so if you’re having trouble making ends meet, you can think about whether a loan with a low down payment would be a good fit for you. Putting a small amount does mean your mortgage will be more expensive, though. In order to protect the lender in the event of default, you might have to pay for private mortgage insurance (PMI), borrow more money, and pay a higher interest rate.

It is preferable to have enough money saved up to put down at least 2010%, and ideally 2020%, before moving forward with a home loan.

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  • You do not want to disclose the home’s state of disrepair to the mortgage lender.
  • Additionally, you don’t want to imply that you are unaware of the source of the funds for your down payment.
  • Lastly, avoid giving your lender any cause for concern regarding the stability of your income.

Lenders want to know that you can afford the property when you purchase a home and obtain a mortgage.

Because of this, there are certain important things you should never discuss with your mortgage lender during the home loan application process as they might raise issues that could make it more difficult for you to get approved for a loan.

Here are three things to avoid saying so you dont raise red flags.

What NOT to tell your LENDER when applying for a MORTGAGE LOAN

FAQ

What should you not tell your lender?

You don’t want to tell the mortgage lender that the house is in disrepair. You also don’t want to suggest you don’t know where your down payment money is coming from. Finally, don’t give your lender reason to worry if your income will stay stable.

What is a red flag in mortgage?

High-level Red Flags Social Security number discrepancies within the loan file. Address discrepancies within the loan file. Verifications addressed to a specific party’s attention. Verifications completed on the same day they were ordered.

What looks bad to a mortgage lender?

Racking up Debt Your debt-to-income ratio – or how much debt you’re paying off each month in comparison to how much money you’re making – is just one factor that lenders look at when reviewing your mortgage application. If it’s above a certain threshold (typically 43%), you’ll be considered a risky borrower.

What should you not say when securing a home loan?

As a result, during the process of securing your home loan, there are a few key things you don’t ever want to say to your mortgage lender as they could raise concerns that could undermine your ability to get a loan. Here are three things to avoid saying so you don’t raise red flags. 1. “The house is in bad shape.”

What should you not say when buying a house?

Here are three things to avoid saying so you don’t raise red flags. 1. “The house is in bad shape.” When you get a mortgage, the home is collateral for the loan. As a result, there can’t be any major issues with the property.

What statements should I not make to my mortgage lender?

There are quite a few statements that you should not make to your mortgage lender, such as, “how much can I borrow?”

What should I avoid before closing a mortgage?

In general, you should avoid financing any large purchases or opening new lines of credit (like a credit card) between mortgage approval and closing. New debts can affect your credit score and debt-to-income ratio (DTI). This could seriously affect your loan approval and interest rate.

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