Things to Avoid After Applying for a Mortgage

By
Real Estate Agent with Keller Williams Realty RS - 0019092

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.

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.

 

 

by Keeping Current Matters

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Topic:
Mortgage / Finance
Tags:
applying for a mortgage
mortgage
dont apply for new credit
dont make large purchases
dont change jobs
dont change banks accounts
dont close credit accounts
dont cosign
dont make cash deposits

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Rainmaker
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Christopher Pataki

Hockessin Delaware Real Estate
What is Your Home Worth?
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