Helpful Home Tips &
Mortgage Advice from Experts

Back to Posts
Frustrated man working on his computer

Five Mortgage Application Problems and How to Avoid Them

The path to home ownership isn’t always easy, but if you’re not careful, you could unknowingly be sabotaging your chances of becoming a homeowner.

Here are five things you may be doing that could keep you from owning a house. Steer clear of them and you’ll avoid the mortgage approval problems.

1. Job-hopping.

Even if you don’t go long without a job, hopping from job to job or even starting a business could ruin your chances of buying a home in the near future and present you with mortgage approval problems. A steady job, preferably at the same company, shows stability and—most importantly—a consistent paycheck that will allow you to pay your mortgage. Aim for two years on the job before you apply for a mortgage.

2. Opening new lines of credit.

If you’re thinking of buying a home soon, think twice before buying a new car, boat, or opening up other lines of credit. Not only does it increase your debt to income ration, but even hard credit inquiries can put a ding on your credit report and reduce your score. Wait until after you’ve closed on your home to even think about taking on additional credit.

3. Making late payments.

Not paying your bills on time can wreak havoc on your credit report—just one late payment can lower your score by up to 50 points. Pay your bills in full and on time every month. If you’re forgetful, use auto bill pay so you never have to worry about missing a payment to avoid mortgage application problems.

4. Maxing your credit out.

When you have multiple lines of credit at the limit, your debt to income ratio skyrockets. Mortgage lenders won’t approve you for a loan if you’re already maxed out. Avoid mortgage approval problems by keeping your credit balances below 30% of your credit limits.

5. Not saving money.

With a number of mortgage loan options like the ones offered by NLC loans, you don’t need 20% down anymore. However, money in the bank is a necessary cushion in case you lose your job or a financial emergency, such as an unexpected repair or medical bill, arises.

Don’t ruin or delay your dream of owning a home with these preventable mistakes. For more information about your mortgage options, or to see if you qualify for a mortgage, contact one of NLC Loans’ personal mortgage advisors toll-free today at 1-877-480-8050.