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Common pitfalls that hinder your real estate transaction.

You’ve feel like you’ve made it through the most challenging parts of your purchase transaction. With the assistance of your experienced Realtor, you’ve negotiated your contract terms, survived the home inspection and repair request negotiations, muddled through the appraisal process, and now you’re at the finish line… waiting to find out whether your mortgage was approved. This final step in your contingency process can be one of the most difficult parts of buying a home. Understanding common pitfalls to your loan approval can help you avoid unnecessary stress in what should be an exciting transition to homeownership.

Before you apply for the mortgage that will land you in your dream home, keep the following mortgage mistakes in mind – as well as this trusty advice on how to avoid them. These errors could cause lengthy delays in the approval process.

Leaving Out Financial Information

Mortgage lenders will expect to know detailed information about your finances, including your income, debts, and employment. If you leave out key information or even minor details, it can throw off the entire loan process.

Not Providing Documentation

Your lender will ask you for a long list of documents that he or she needs to acquire from you. From pay stubs to tax returns to bank deposits to home insurance, there is plenty of paperwork to track down. While you may think that this is unnecessarily time-consuming, forgetting to send over last year’s tax return could delay the mortgage process by days, or possibly weeks. Please act quickly when your lender requests information. In a real estate transaction, time is always of the essence. The lender will also run your credit report, which can reveal employers, addresses, debts, and other credit inquiries that you don’t disclose. Provide it all for a smoother process.

Not Paying Attention to Mortgage Rates

Rates are constantly changing, pay attention to any increases which can affect your chance of being approved at your accepted offer price. Any slight increase in interest rates can prevent you from being a viable purchaser at your agreed price. Avoid getting locked into a higher rate than what you expected and make sure your lender is taking rising rates into consideration.

Confusing Approval with Pre-Approval

Getting a mortgage pre-qualification means you’ve talked to a lender and may have even provided a few documents. All in all, the lender has said that your profile looks good. Make no mistake – this isn’t a loan pre-approval. Be sure you ask your lender to obtain a formal loan commitment in writing, this requires providing the loan officer with your full personal documentation. Anything short of a formal pre-approval letter may prevent a seller from considering you as a qualified buyer. In fact, the next step after pre-approval is full loan approval. This doesn’t occur until your complete loan package is submitted to an underwriter to be reviewed and approved. Buyers won’t have full loan approval until later during the transaction. This step toward full loan approval also requires “conditions” to be met that are also reviewed and approved by the underwriters. Talk to your real estate professional and lender for more detailed explanation.

Like any other major financial decision, some planning, calculating, and advice from experts never goes amiss. To get started on your home search, visit your local expert! Contact Jenn Blake Real Estate Group at Pacific Sotheby’s International Realty in San Diego, California at 858-663-6788.