- Blog
All sorts of mistakes can be made when applying for a mortgage, which can lead to the failure of your mortgage application or financial problems.
Common mistakes include underestimating monthly payments, not reporting debts in a timely manner, incomplete or inaccurate documentation, and not comparing different mortgage providers. Not reporting BKR registrations in a timely manner, for example, can also be a problem.
Therefore, make sure you have all the information in order beforehand so that when it comes time to buy your dream home, you won’t run into trouble and see the purchase fall through.
Therefore, below we list all the things you need to think about if you want to apply for a mortgage so you can be well prepared.
What all do you need to submit to the mortgage lender?
You will need several documents for a mortgage application, including a valid ID, recent pay stubs, an employer’s statement, an appraisal report and a purchase agreement.
Depending on your situation, additional documents may be required, such as records of your savings, loans, or records of your previous home.
The most important documents you need to gather together are:
- ID: A valid passport or identity card is required.
- Income information: Recent pay stubs and an employer’s statement (no more than 3 months old) are essential. Self-employed individuals must also submit their annual figures, income tax returns and assessments.
- Bank statements: A bank statement for a full month, showing the crediting of your salary (with no illegible amounts), is required.
- Appraisal Report: An appraisal report of the property you want to buy must not be older than six months and must be validated.
- Purchase Agreement: The purchase agreement of the home you want to buy.
- Own money: Proof of your own money, such as a bank statement showing your savings, if you used it to buy the home.
- Selling old home: If you are selling a home, you will need documents such as the original mortgage debt, the preliminary sales contract or appraisal report and the WOZ value of your old home.
- A statement of loans and other financial obligations: Statements of current loans or proof of repayment.
- Pension statements: If you are over the age of 37, the lender can request pension statements.
- Notary’s contact information, Inclusion of remodeling costs (if applicable), Overview of your insurance policies, Details of loans (e.g. student debt with DUO).
- Divorce Covenant: If applicable, a divorce decree and order.
What mistakes are often made when delivering these documents?
1. Incomplete or incorrect employer’s statement
The employer statement is a crucial document in a mortgage application, and errors in it can lead to delay or rejection. Common errors include incorrect income information, an incorrect term of the contract, or missing essential information about the job or employment.
2. Late or incomplete documents.
It is important to provide all required documents, such as pay stubs, bank statements, and proof of identity, to the lender in a timely and complete manner. Incompleteness or delay may delay or even reject the application.
3. Forgetting expenses and loans
Some applicants forget to include certain costs, such as buyer’s fees (appraisal, notary fees, etc.) or current loans (student debt, personal loan, and so on), when calculating the maximum mortgage. This can lead to an excessive mortgage application or problems in closing the mortgage.
4. Insufficient consideration of the future
A mortgage is a long-term financial commitment, and it is important to consider future changes in one’s personal situation. Consider family expansion, a possible career change, or wanting to pay off the mortgage sooner. A mortgage advisor can help with this by outlining scenarios and showing the impact on monthly payments and the total mortgage.
5. Insufficient comparison of mortgage providers.
There are many different lenders with different terms and interest rates. It is wise to compare different providers to find the mortgage that best suits your personal situation and needs. A good mortgage broker can play a role in this process by comparing different providers and discussing the pros and cons of each option.
The importance of a good mortgage broker
As described above, buying a home really all starts with a good and reliable mortgage broker.
A good mortgage broker will take the time to properly list what is possible and give you high-quality financial advice.
They also need to think along with you and always be accessible, so that you can switch quickly when necessary. Because it is very important to know whether your dream home is actually feasible and up to what amount you can possibly bid.
After all, it would be very sour if your offer is accepted and then the mortgage turns out not to come through. Nowadays there are even possibilities to have your financing checked in advance so you can be sure you can pay for your dream home and you can move quickly. So be well informed and advised!
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