The last thing you want to do is ruin your mortgage approval once you've gotten the go-ahead from the lender. If you've been preapproved for a loan there are some things you can do that will actually ruin your chances of getting the loan. This can terminate the transaction and really put a ding on your credit report. So, once you've been preapproved for a mortgage or home loan what shouldn't you do in order to keep that loan in good standing order until you close?
#1. Don't apply for any new credits.
When you are in house-buying mode stay in this mode until you close. You shouldn't be applying for any other loans, car loans, furniture loans or financing of any kind until this loan closes. You don't want to change your credit score or anything major on your report between the time you are approved in the time your loan closes. Any major changes could affect your loan rate and even your ability to get the loan.
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#2. Don't make any large purchases.
Not just simply with credit or applying for new credit, but even making new large cash purchases can affect your rate. Banks and lenders want to see how much money you have in the bank and if you decide to buy a car and take out $10,000, that could affect your rate.
#3. Don't change jobs.
This could be out of your control, but if at all possible, don't quit, get fired, or get laid off while you are going through the home approval process. Employment verification is essential for loan approval and while it may be okay to get a promotion or a position change within your current employment, changing jobs completely could be a detriment to your loan.
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#4. Don't make any large movements with money unless it is for the home loan.
Large deposits, hefty withdrawals, and money from nowhere looks a little too suspicious for a lender. Unless you are moving money from one asset to another in order to purchase the home, don't make any large deposits or changes in your finances. This could change your approval rating. Lenders need to be able to trace any large deposit origins so that it doesn't look like you are taking out another loan in order to make a down payment. Gifts, however, are fine as long as you have an explanation.
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I pretty much tell all of my clients not to do anything financially when they are in the loan approval and homebuying process. Any financial decision should only be made when it comes to the house purchase. Don't buy a car, don't apply for student loans, and don't make any large purchases and your rate and financing should be on track to closing.
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