When you get what you think is a home loan approval letter in the mail, you understandably may be very excited. However, before you act on this letter, you should avoid making some common home loan mistakes that could sink your homeownership prospects. These precautions can help you avoid a financial fiasco that could jeopardize your credit and your ability to buy a home in the future.
Letter From an Out-of-Town Lender
If your letter is from a lender from out-of-town, you should use caution before acting on the letter’s contents. An out-of-town lender may be prowling for vulnerable and hopeful would-be homeowners who are desperate to buy a home at any cost. This company may also be trying to compromise your identity and access your bank account.
Qualification Versus Approval
Many people who have had past credit issues get pre-qualification letters in the mail. These letters again may be bait for people to give out money and identify information. Pre-qualifying for a house does not mean that you are approved for a loan. The loan inquiry itself could be a hard hit on your credit report, which could lower your score.
As the economy rights itself and more people are entering the homebuyer market, you may be anxious to buy a home yourself. However, you should avoid jeopardizing your credit and your money by avoiding these home loan mistakes. Taking the time to read the letter and determining if it is a scam can help you safeguard your buying prospects later.