Avoid These Typical Errors After Mortgage Application
Prepare for the excitement of buying a home by considering crucial factors after applying for your mortgage and before finalizing the deal. Here's a checklist to bear in mind during the home loan application process:
Avoid Large Cash Deposits
Lenders require traceable funds, and cash deposits can pose challenges. Before depositing cash, consult your loan officer to determine the appropriate documentation process.
Refrain From Significant Purchases
It's not just home-related buys that may affect your loan approval. Any substantial purchases can raise concerns for lenders. New debts contribute to higher debt-to-income ratios, potentially jeopardizing your mortgage eligibility. Resist the urge to make large purchases, including furniture or appliances.
Say No To Cosigning Loans
Cosigning commits you to the success and repayment of a loan, impacting your debt-to-income ratios. Even if you're not making the payments, lenders consider the obligation against you.
Avoid Changing Bank Accounts
Consistency in your accounts simplifies the sourcing and tracking of your assets for lenders. Before any account transfers, consult your loan officer.
Refrain From Applying For New Credit
Whether it's a credit card or a car loan, new credit applications influence your FICO® score. Lower credit scores can affect your interest rate and mortgage approval. Resist applying for new credit in various financial channels.
Don't Close Existing Accounts
Closing accounts may seem like a risk education strategy, but it negatively impacts your credit score, especially regarding credit history length, depth, and credit utilization ratio.
Communicate Changes With Your Lender
Discuss any anticipated or recent changes in income, assets, or credit with your lender. Transparent communication ensures that your home loan remains on track. If recent shifts in your job or employment status have occurred, share that information with your lender.
Aim for a smooth home purchase process. Before making significant purchases, altering financial arrangements, or implementing major life changes, seek advice from your lender - someone qualified to explain the potential impact of your financial decisions on your home loan. Contact us today to learn more about our recommended lender.