Q. What things should I keep in mind when applying for a mortgage?
A. There are a few critical mistakes to avoid when applying for a mortgage. These are important while obtaining a pre-approval and shopping for a house, and they stay important right through the day of settlement.
Throughout the mortgage process, banks are scrutinizing your credit score and income to debt ratios. Do not do anything that could adversely affect your credit score or cause your monthly debt to increase. This scrutiny continues right up until the closing with last minute checks of your credit report and employment verification. Any changes could cause the loan to be denied or the interest rate and fees to increase.
First and foremost, do not apply for any type of new credit; this includes:
¨ Buying furniture/appliances with interest-free financing
¨ Leasing/purchasing a new car
¨ Applying for any new student loans
¨ Co-signing a loan for anyone else
Do not change credit card usage or let payments fall behind
Do not miss any bill payments
Do not close any credit cards
Do not make any large purchases until after closing
Do not change banks or open any new bank accounts until after closing
Do not change jobs or become self-employed
Do not make any large deposits into your bank account without the consent of your lender
Do not make any cash deposits of any amount into your bank account
Do not mistakenly spend the down payment money on other expenses or bills