Top 5 Things That Can Mess Up Your Loan Transactions- MM S1E9




Welcome to a new episode of Monday Mortgage Madness!

What can we stop us from getting approved for a loan? Let’s go over the top 5 things that can do so!


1- The soft pull

A soft credit check is a tool that verifies if there have been any inquiries or  any balances have gone up in your credit card reports, if balances go up that soft pool is going to recalculate the monthly payments, so definitely be careful with this. Actions like  buying new furniture before closing happen a lot and can affect your loan approval too, so wait till you have the keys and close on a new home to make any upgrades and keep your balances at zero in the meantime.


2- Student loans


Today’s young adults are delaying home ownership for multiple reasons, including overwhelming debt..When lenders sit down with your mortgage application, they look at a couple of different things, like how much debt you owe and how much of your income the payments eat up each month. If you have a big debt in student loans and you’re not making a huge salary yet, your debt-to-income ratio is going to be a huge factor that can definitely stop you from being approved for a new loan.


3- Credit Scores

Why are credit scores so important? Because it gives lenders an idea of how responsibly you are with money and if they find irresponsible credit behavior, that could contribute to lower credit scores.


Making a late payment on your credit card, mortgage or student loan is one of those irresponsible and very common behaviours that we’ll have to be careful with. Late or missed payments can significantly affect your credit scores and overall credit health.


If you’ve proven that you can’t pay debts on time, that’s a potential red flag to get approved for a mortgage.


A hard inquiry could reduce your credit scores by a few points or it may have a negligible effect on your scores. Normally, a single hard inquiry isn’t something you should worry too much about. But if you’ve applied for several accounts in a short period of time, you could appear desperate for credit, and the damage from those hard inquiries might add up.

To avoid unnecessary inquiries, try to only apply for credit when you can afford it, and try to focus on keeping a good chance of getting approved.


4- Judgements, Tax liens and Public records


A tax lien or civil judgment can still impact you even if it no longer appears on your credit reports or affects your credit scores, specially when applying for a mortgage.So make sure you pay all these: if you don’t want to pay your taxes prior to closing, that will be a problem to close on a new property.


5- Medical Collections


Medical collection accounts can be a pain to remove from your credit reports. In many cases, it doesn’t affect the loan approval, but make sure you get your credit approved. With a lot of loan programs, if it’s under 5000 dollars it won’t affect the loan approval, but make sure if it can affect your loan approval, and get your credit approved.


Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.



Stay hungry and stay positive!

Make it a great day,

Sean La Rue



Instagram: @seanlaruehomeloans


This entry was posted in Uncategorized by Sean La Rue. Bookmark the permalink.

About Sean La Rue

Sean lives in the Palm Desert area and works with Franklin Loan Center as the Senior Vice President. Sean is ready to provide you the concierge level-of-service experience in purchasing or refinancing a home in Palm Springs, Palm Desert, La Quinta, Rancho Mirage, Coachella, Indio, or anywhere in California. His commitment is to treat your home loan like his own because he cares about your family.

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