Applying for a loan is often a tedious process. There are a lot of requirements to meet, a lot of documentation to gather, and a lot of questions to answer. On top of that, you also have to go through an interview with a mortgage lender who is responsible for assessing your qualifications and deciding how much you can borrow, or if they will let you borrow at all.
Finishing the application and gathering documentation is relatively easy, but the interview is another story. What you say (or in some cases, don’t say) can make or break your application. Hence, it pays to be careful of what you say to your mortgage lender at any point of the process. If you don’t want to hurt your chances of getting approved or qualifying for a good mortgage loan rate, here are the things that you should never say to the loan officer:
Never say anything untruthful to your mortgage lender. However, this doesn’t just include untruthful information, “lying” can also take the form of omitting important information. Not only will you get disapproved if you get caught, but you can also get charged with a felony due to mortgage fraud.
That said, do not ever try to lie to your mortgage lender, because they will find out. Aside from not being able to get a mortgage with them, you may also be blacklisted from other lenders as well–not to mention the possibility of getting charged.
2. “How Much Can i Borrow?”
Or “what is the most that I can borrow?” are not good questions to ask your loan officer. Before you start the application process, you should have an estimate of how much you can borrow from a pre-approval or pre-qualification. You have to show that you are someone who has done their homework and treats this loan as a major financial undertaking.
Furthermore, you shouldn’t be maximizing the amount of money you can borrow in the first place. If you accept the ceiling amount that you are offered, you may find yourself in a tight financial spot in case you run into unexpected expenses down the road, even if you have a healthy emergency fund in place.
3. “The House Needs a Lot of Work Before We Can Move in”
Don’t say anything along these lines. Unless your loan officer asks about it, do not mention anything about the home inspection report. Saying that the house needs a lot of work may seem like an off-handed comment for you (or a comment that could get you a higher loan amount), but it tells the lender that the house could have bigger problems later on. Why is this a problem for them? Because if you have to pay for a lot of issues in the house, you may have trouble making monthly payments.
If they ask about the home inspection report, say only what you need to say. The worst thing that can happen is that they ask for a large amount to be escrowed for repairs.
4. “I’m Still Figuring Out the Down Payment”
When you walk into a home loan interview, you want to appear as someone who is serious about the huge financial move they are about to take. If you haven’t worked out the details about the down payment yet, you may hurt your chances of getting approved.
The down payment is a crucial part of any home application, and down payment is the second most common type of mortgage fraud. For these reasons, lenders want to see where exactly your down payment is coming from; they want you to prove that you are not borrowing it from anyone else, be it another individual or another lender.
If you are receiving a portion of the down payment as a gift, the lender will also ask you for a paper trail. That said, it is best to ask them about cash gift policies before the giver writes you a check.
5. Anything About Job Changes
Most lenders will require you to have stayed in your company for at least two or so years before you can become a qualified borrower. This length of tenure with a single employer shows that you have a stable income and won’t be changing jobs anytime soon. So making comments about jumping from one job to another or plans about taking on a commissioned job is a no-no.
Don’t hurt your chances of acquiring a great home loan with these types of comments or statements. Furthermore, make sure that you provide accurate and complete information, but don’t volunteer information that