So, You've Got A Loan Approval.....Now Let's Keep It!

Real Estate Broker/Owner with State Wide Realty Co.

Getting through the Mortgage Process....APPROVED!!

You've found the perfect home, you've made an offer, and you've completed your loan paperwork….you're almost there! Just don't drop the ball now – follow these rules to ensure a touchdown for your entire family!!  You know your credit has been alright to this point, but now let's talk about keeping it that way throughout the mortgage process.

1.       Don't apply for new credit of any form:   And when I say any—I mean ANY!!  Most, banks pull your credit just before closing and every credit inquiry pulls your credit score down or you could change your debt to income ratio.

·         Don't continue mortgage shopping – in some cases people have looked so long for mortgages they disqualified themselves.

·         Don't lease or buy a car

·         Don't go furniture shopping and take advantage of those no payments for 12 month programs (Guess what, they'll pull your credit too)

·         Don't get any new credit cards – even the ones that say "pre-approved" (they will pull your credit!!)

·         Don't cosign for anyone else's lease

2.       Don't change your financial practices:  Unusual activity can raise red flags. So keep it normal and safe. Meaning:

  • Do keep all of your existing accounts current – including your mortgage or rent!!
  • Don't switch banks
  • Don't over-use your credit cards – keep 30%   availability
  • Don't consolidate debt onto 1 or 2 cards – this could make it look like you have maxed out 1 or more cards.
  • Don't enter into credit counseling
  • Don't close existing credit cards – this could change your debt ratio
  • Don't pay off old collections accounts – this could lower your credit score.

3.       Don't change employersmortgage companies consider length of employment, so try to delay any career changes.

4.       Don't move - mortgage companies consider the amount of time you have lived at a residence.

5.       Don't pack important documents - the lender will need information from you such as bank statements and W-2, make sure they are accessible.

6.       Don't spend all your money – many lenders require that you have a certain amount of money in the bank after closing costs and will verify this before closing. Check with your lender before you start spending.

7.       Don't avoid your lender – this means providing them with requested information and any and all changes made to your contract throughout the mortgage process.

8.       Do ask questions and stay informed- lenders and your real estate agents can answer many questions to help you understand the process. Suggested questions:

             ·         Can I see my credit report?

             ·         Can you help me understand the Good Faith Estimate?

             ·         Has the property been appraised?

             ·         Did the appraiser point out any problem areas?

             ·         When will the underwriter have my paperwork?

             ·         When will the closing agent/attorney have my file?  

                 ·    Can you explain the closing  statement?  

To sum it all up, remember that they don't just pull your credit report and then you're free and clear. Keep your credit as normal and clean as possible throughout the process and stay informed. You're almost done, just a little more diligence and you'll have the home of your dreams!




Photo Attribution: Photo taken by Editor_Tupp.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Roy Kelley 01/17/2011 10:43 PM
  2. Cheryl Dickson 11/24/2011 03:15 AM
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Paula McDonald, Ph.D.
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

Great information but sadly not all heed the advice.  Have a young couple still trying to get their loan through due to opening new credit during Christmas.  Argggg!!!!

Jan 17, 2011 02:20 AM #1
Larry Atkins
State Wide Realty Co. - Farmville, VA

Paula, that's too bad, I wish there was some sort of class people had to sit through before beginning the process...sometimes we just need protection from ourselves when we're out of our element.

Jan 17, 2011 02:40 AM #2
Rita Norman
Walnut Creek, CA
Your Agent in Walnut Creek CA

Larry: Great summary... perfect as a check-list to hand clients. Sadly life happens in the middle of a transaction too. A few weeks away from closing Escrow and lender informs the client she is no longer qualifying. Luckily we could add a co-borrower, but we have to do a lot of work to add him onto all contracts, counters, disclosures, reports etc. Lesson: nothing's bullet-proof, even with a check-list.

Jan 17, 2011 09:04 AM #3
Karen Crowson
Coldwell Banker Residential Brokerage - Rancho Bernardo, CA
Your Agent for Change

These are teriffic points for buyer's to heed.  The ones that do will be successful.

Jan 17, 2011 10:34 AM #4
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL

Larry - Excellent list of DO NOT's for home buyers.  I know so many are tempted to buy new furniture prior to closing or open a credit card, but they really need to wait.

Jan 17, 2011 12:23 PM #5
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Very good advice for home buyers. Too many make these mistakes and then find that they will be unable to complete their home purchase.

 The colors of winter in Maryland. Life is good!

Jan 17, 2011 10:39 PM #6
Cheryl Dickson
Retired Realtor / Retired Home Inspector - Oklahoma City, OK
Retired Realtor, GRI / Retired Home Inspector

Wow Larry, this is OUTSTANDING! I hope you don't mind if I re-blog this, and suggest it! I think it's about time to remind everyone of these important tips.. Thank You for sharing mine, but I have to say yours is so much more informative that I want to post a link in the comments on mine. This stuff really can help alot of Buyers! -Cheryl

Nov 24, 2011 03:10 AM #7
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Larry, I came by way of CHeryl reblog and so glad I did.  Great list that too many buyers forget or are unaware of.  Suggested as well.

Nov 24, 2011 03:26 AM #8
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Thanks to Cheryl for sharing this post. So much common sense but  buyer's need to read this!


Nov 25, 2011 04:47 PM #9
Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Dear Larry,

Thanks for the list of the important points for Buyers. One can understand the temptation to get that new sofa ready for delivery B U T ---  it must be a temptation postponed, eh?

Have a happy day -

Nov 27, 2011 04:33 PM #10
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