7 Things To Avoid After Applying for a Mortgage

By
Real Estate Agent with HomeSmart SA631380000

 

7 Things To Avoid After Applying for a Mortgage! | MyKCM

Congratulations! You’ve found a home to buy and have applied for a mortgage! You are undoubtedly excited about the opportunity to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan.

Below is a list of 7 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 new 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 payment 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 money between accounts, 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 have erroneously believed 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 those determinants of your score.

Bottom Line

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.

Comments (7)

William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

It was the holidays and my first time buyer was so happy he went shopping and got 12 new credit cards.  I was pretty new and had not anticiapted that

Mar 13, 2019 03:07 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Cherie Ann,

Very true. I can add another story about his and hers Mercedes cars, that each cost more per month than the mortgage would have at the time. Talk about impulse buys.

Mar 13, 2019 07:37 PM
Kate Steven
5homestyle - Adak, AK
Best Real Estate agent

Welcome to active rain. Good luck in achieving your goals on active rain

 

Mar 14, 2019 08:50 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Cherie Ann Stall welcome to ActiveRain and congratulations on posting your first blog successfully on this site.

Mar 17, 2019 04:27 PM
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Welcome to ActiveRain! This is a great place to learn about real estate and get support for you as an agent or broker. 

 

Make sure to become a Rainmaker if you are not one yet because that is how you will get a strong link back to your website. 

 

The public, consumers consisting of buyers and sellers of real estate will only see your posts if you have a Rainmaker account. 

 

I wish you luck on your online journey of marketing!

 

Mar 18, 2019 07:16 PM
The Woodland Team of Texas
The Woodland Companies - Austin, TX
Land Specialists

Nice job on your first post!
Welcome to ActiveRain, I hope that your participation here helps your business to grow.
Btw, I followed your blog, and would be honored if you followed mine.
Thank You!

Mar 19, 2019 07:58 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Welcome to Active Rain, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
All the best of success to you.
Bob

Apr 20, 2019 10:42 PM