6 Things to Avoid After Applying for a Mortgage
Congratulations! You’ve found a home to buy and have applied for a mortgage. You’re undoubtedly excited about the opportunity to decorate your new home, but before you make any large purchases, move your money around, or make any big-time life changes, consult your loan officer – someone who will be able to tell you how your decisions will impact your home loan.
Below is a list of 6 things you should avoid after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.
• Don’t Deposit Large Sums of Cash Into Your Bank Account12
Lenders need to source your money, and cash is often difficult to trace. Before making any large deposits, it’s wise to ask your loan officer how to properly document that money.
• Don’t Change Your Bank Account12
Lenders need to verify all of your assets, and if you decide to switch banks during the process, it could make things more complicated for them and delay your closing.
• Don’t Make Any Large Purchases324
This includes buying furniture, appliances, electronics, or cars. Lenders are looking at your debt-to-income ratio and any increase in your debt can affect your ability to qualify for the loan or the interest rate you’ll pay. It’s best to wait until after closing to make any major purchases.
• Don’t Change Jobs or How You Receive Payments12
Lenders need to see a consistent and stable income history in order to approve your loan. Changing jobs or switching from salary to commission can raise red flags and delay your approval. If you do have a job change, make sure to inform your loan officer as soon as possible and provide all the necessary documentation.
• Don’t Co-Sign on Another Person’s Loan12
Co-signing on someone else’s loan means you are responsible for their debt if they default. This will increase your debt-to-income ratio and affect your ability to qualify for your own mortgage.
• Don’t Start Applying for New Credit132
Every time you apply for new credit, whether it’s a credit card, a car loan, or a personal loan, it triggers a hard inquiry on your credit report. This can lower your credit score and make you look risky to lenders. It can also affect the interest rate you’ll pay on your mortgage. It’s best to avoid applying for any new credit until after you close on your home.
By avoiding these six things after applying for a mortgage, you can help ensure a smooth and successful closing on your new home. If you have any questions about what else you should or shouldn’t do during the mortgage process, don’t hesitate to reach out to your loan officer. They are there to guide you and help you achieve your homeownership goals.
