Is this the year for you to start the exciting journey of applying for a mortgage and start your home buying process? Securing a home loan is a significant step, and it's crucial to present a strong financial profile to potential lenders. To help you navigate this process successfully, here are ten indispensable tips to guide you on your path to homeownership.

1. Change Employment

Lenders favor applicants with a stable employment history. Avoid changing your job status just before, during the mortgage application process and when under contract. A consistent work record showcases reliability and financial stability to lenders and the underwriters.

2. Pay Bills On Time

Credit history is highly looked at when lenders review an application to apply for a mortgage.  When late payments occur on more than one occurrence it questions the ability to pay on time. Ensure your payments are made on time to maintain a positive credit history. This practice not only demonstrates financial responsibility but also enhances your chances of securing a mortgage loan and potentially getting a better interest rate.

3. Open new lines of Credit/Loans

Refrain from making significant purchases, such as a new car or expensive furniture, on credit before, during the mortgage application process and especially while under contract. Debt to Income ratios are highly scrutinized by underwriters when reviewing applications.  Lenders and Underwriters do not want to over-extend the applicants by having more debt than income.  If the debt to income ratio is too high it could affect your chances of securing the loan.

4. Unusual Deposits or Transfers

Large and unexplained transfers of money between accounts can raise red flags for lenders. Being transparent in and explaining everything can help lenders understand the true story of your finances.

When applying for a mortgage application it can seem so straightforward but there are also some unknowns that can hurt your chances.  Knowing these unknowns will help you when trying to purchase a home.  Maintaining a low debt to income ratio, consistent employment, not making unusual bank deposits or transfers and paying bills on time will help your lender see you showcasing financial responsibility and transparency.  Remember, these are total strangers and your finances have to tell a story, so be transparent to allow that story to be told. Understand these NOT to do’s and securing a home loan and a home will be in your future!