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How to Avoid Having Your Financing Fall Through

By July 26, 2019 Buying/Selling Homes
Calgary Home Inspector, Financing Fall Through, Mortgage Approval

You got pre-approved, went through the exciting house hunting process and finally found a home you love and negotiated a fair price… We’ve been there ourselves! It can be a uneasy time awaiting financing approval. Knowing many of our clients experience this during the home buying process, we reached out for some advice from a seasoned professional, Sherry Jenkins of Axiom Mortgage Solutions, who has been in the industry for twenty years. We asked Sherry for some advice on how to increase your odds of turning that pre-approval into a firm approval so that we could share this info with our valued readers and followers.

Pre-Approvals
While pre-approval will give you a great idea on a price-point to shop for that will fit with your budget and align with your income and debt-to-equity ratio. Unfortunately, they are not a guarantee that you will be approved for financing if you find a home under the pre-determined purchase price. When you put an offer on a home, you will need to get approved from both the bank and the mortgage insurance company and go through another credit check.

Once you get Pre-Approved, Avoid Changing Your Financial Foundation

A number of factors influence your mortgage application. Your credit score is of the upmost importance when it comes to financing, the higher the score the stronger your application. With recent changes in the industry and our economy, lenders are most comfortable lending to individuals who score in the high 600’s or greater. With that being said, here are important factors to consider during the time you are shopping for a new home:

Credit
With credit scores being a major component to your application it is important to ensure you:

  • Make your payments on time, especially your credit card, cell phone and income taxes
  • Keep the balance on your credit cards below 50%
  • Avoid opening new credit cards

New Debts
Opening new accounts and borrowing funds will effect your debt-to-equity ratio, reducing the strength of your application, be sure to:

  • Wait to purchase a new vehicle, RV, etc…
  • Avoid co-signing on any loans
  • Avoid opening new lending accounts

Job Changes
House hunting can take months and while we know things can change, however it is best to avoid switching jobs prior to purchasing a home. Banks like to see that you have been with a company for three months or more, and clear of the probation period. With that being said, if your new position is in a related field this becomes less of a concern. It can be worthwhile to take on better position, but speak with your mortgage representative and consider the impact on your mortgage application.

Lastly, if you have been declined, Sherry encourages you to get a second opinion. Mortgage brokers have access to a large number of lenders and are not all created equal, experienced mortgage professionals have the expertise on how to strengthen an application and to choose lenders that would be the best fit.

We hope this helps, happy house hunting!

Thank you to Sherry for sharing her expertise with us!

Sherry Jenkins

Mortgage Professional

Seasoned mortgage professional, owner of Axiom Mortgage Solutions, Sherry has over twenty years experience helping buyers secure their financing for their homes.

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