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 Things You Shouldn’t Do After Applying for a Mortgage. Some may seem obvious, but some may not.
1. Don’t Change Jobs or the Way You Are Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.
2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
3. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios…higher ratios make for riskier loans…and sometimes qualified borrowers no longer qualify.
4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payments against you.
5. Don’t Change Bank Accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer any money, talk to your loan officer.
6. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
7. Don’t Close Any Credit Accounts. Many clients erroneously believe that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants in your score.
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.
Considering Buying or Selling a Home?
If you are looking to buy or sell a home in Cape Coral, Fort Myers or Estero, I encourage you to work with a real estate professional or consultant who has the experience and knowledge to provide an accurate market comparison so you can set the Price Right. Contact us today to learn more about the current market and if selling how your home or condo stacks up against the competition and how we can position your property to sell quickly and for a fair price. Learn more about selling your home
If you’re looking for a focused and goal-oriented Realtor® in Southwest Florida who will help you achieve your Real Estate needs, please reach out to me directly. Additionally, if you are looking at buying or selling a home or condo, vacation home/condo, waterfront home/condo or to build your own dream home, call or text me at 239-770-6880 or email me at Jon@southwestfldreamhomes.com
About Jonathan Blaze, PA
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Jonathan Blaze, MVP Realty or Southwest FL Dream Homes Team or Keeping Matters Current do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Jonathan Blaze, MVP Realty or Southwest FL Dream Homes Team will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.