You’ve had steady employment for years, things are going well in your life, and you’re ready to make the move from being a tenant to being a Shuswap homeowner – congratulations; these are exciting times!
There are many things to consider when it comes to homeownership and obtaining a mortgage – and there are also a few common errors that people may make in the process you’ll want to be on the lookout for. Here are three big credit mistakes you should be aware of and work to avoid:
Mistake #1: Being Unaware of Your Credit Information
Knowing your credit history and the information within your personal credit file is so important. You may think you’re aware of everything in your credit history, but when was the last time you reviewed your repayment history, open trades or any changes to limits, etc. If you happen to have a small amount of money that was sent to collections without your knowledge, or there’s an error or misinformation on your bureau, it can negatively impact your credit score – and potentially take a while to fix – which could result in a delay or denial of your mortgage approval.
Mistake #2: Timing is Everything
When you’ve decided that you’re serious about buying a piece of real estate, you’ll want to have your mortgage broker shop around with their trusted lending partners to find the best rate and product for you. Once you’re pre-approved, you’ll need to purchase a home within 60-120 days (depending on the lender) to adhere to the expiration date on your offer. If the qualification terms do expire, your mortgage professional may have to pull your credit history again and gather updated financial documentation from you which can slow the process down. A helpful hint is to speak with your mortgage broker ahead of time, to establish your affordability, purchasing timeline and pre-approval needs.
Mistake #3: Maxing Out Credit Cards, Opening a Line of Credit, or Making a Large Purchase
Once you’ve been pre-approved for a mortgage, you want to keep your credit in good standings. It’s crucial that you DO NOT make any large purchases, open a new line of credit, or max out any existing credit cards, as this can result in you no longer being approved for a mortgage. When in doubt, reach out to your mortgage broker and ask if your actions would directly impact your approval.
If you’re ready to enter the wonderful world of Shuswap homeownership, I’m here to help you! Get in touch today and we’ll chat about your best way to move forward.