7 Things You Should Not Do After Applying for a Mortgage
Congratulations! You’ve found a home to buy and have applied for a mortgage! You are excited and can not wait to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan. So here are seven things to avoid after applying for a mortgage.
7 Things You Should Not Do After Applying for a Mortgage! Some things may seem clear, but some may not!
Seven Things Not To Do Before Speaking To Loan Officer
- DO NOT change jobs or the way you are getting paid! Avoid changing from salary to commission or becoming self-employed during this time. Your loan officer needs to track the source of your annual income.
- DO NOT deposit cash into your bank accounts. Before you deposit any cash into your bank account talk to your loan officer. Lenders need to source money, and cash is not easy to trace. Remember your loan officer will guide you and answer all your questions.
- DO NOT make any large purchases(New Car, or furniture for your home) Doing this will give you new debt including a monthly payment. This will cause a higher debt to income ratios. Higher ratios mean riskier loans and may cause you not to be no longer qualified.
- DO NOT co-sign any other loans for anyone. Co-signing makes you obligated. With that obligating is a higher ratio. It does not matter if you are not the one going to make the payments; your lender will still have to count the payment since your name is on loan.
- DO NOT change bank accounts. Talk to your loan officer before you even transfer money between accounts. It is important because lenders need to track assets.
- DO NOT apply for new credit. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your credit score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
- DO NOT close any credit accounts. Many buyers have believed that having less available credit makes them less risky and more likely to be approved. Completely Wrong. A significant component of your score is your length and depth of credit history and your total usage of credit as a percentage of available credit. Closing accounts hurt your score.
Bottom Line
Any change in income, assets, or credit should be reviewed and executed in a way that ensures your home loan will still be approved. You should fully disclose and discuss your plans with your loan officer before you do anything financially. Remember they are there to guide you through the process.