Bad Habits That Can Affect Your Chance of Securing A Mortgage

by Tammy Arbour 09/29/2019

Securing a mortgage can be quite challenging if you do not meet specific requirements and demands made by the lenders. But really, you can’t blame lenders or mortgage companies for setting up these rules. Most of these demands are made to ensure the borrower can repay a loan without too much of a problem.

Everyone has one or several bad habits that have affected them or will affect them one way or another. When it comes to securing mortgage though, some bad habits might interfere with that decision. These habits will cast a shadow over your profile, putting doubts in the mind of the lender. Bad habits like any of the ones listed below will affect your chances of securing a mortgage.

Gambling

Gambling is a terrible financial habit that could also be addictive. Betting away some of your money on rare occasions is not enough to affect your chances of securing a mortgage. Taking out credit or a short-term loan to finance your gambling habit, however, will affect your chances of obtaining a mortgage – your gambling habit might also make you default on your credit card repayment.  

Personal Debt

Having substantial private debt will most likely cast doubt on your mortgage request. Lenders would be skeptical about your ability to pay back a new loan. Before you go ahead and apply for a mortgage, pay off all outstanding debts and keep a clean savings profile.

Defaulting on payments

Having a history of defaulting on previous loan repayment will reduce your chances of getting a mortgage. Defaulting is the single worst thing you can do to yourself. Lenders would not want to provide a loan to an individual who has a bad habit of defaulting.

Exceeding Overdraft 

Another bad habit that will cast doubt in the minds of lenders is exceeding your overdraft limit. If you don’t have an arranged overdraft limit, contact your bank. If lenders go through your bank statement and find your account messed up irrespective of how much income Is in there, they would probably turn down your application for a mortgage.

Late Credit Payments 

Making a late payment on your credit card and other loans is an excellent way to dig your own grave when requesting for a mortgage. A single late payment can mess up your credit score and would remain on your credit history for as long as seven years. 

If you are guilty of any of these habits and intend to secure a mortgage, you need to have a clear record first before proceeding with your application for a loan. If you are worried about whether you will qualify for a mortgage, talk to your real estate agent about your options and use prequalification forms to determine your likely approval.

About the Author
Author

Tammy Arbour

THE MOST essential concern when choosing a Real Estate professional is to find someone you can TRUST.

Tammy has a history of success and integrity in Real Estate that you can depend on. She's an Experienced negotiator with knowledge of the local market. Tammy enjoys working with both buyers and seller, guiding them throughout their entire real estate journey. 

14 years of Real Estate experience along with education & management experience. Tammy is a lifelong resident of Hudson, she's married to her husband Frank and they have two wonderful boys, Andrew & Justin, a dog Roxy & a kitty cat Oreo. 

Tammy has been a Massachusetts Realtor since 2003

Tammy Arbour, your number one source for Hudson, MA Real Estate, Marlborough, MA Real Estate, Stow, MA Real Estate, Berlin, MA Real Estate, Bolton, MA Real Estate, Northborough, MA Real Estate, and surrounding towns. Feel free to contact me today.