Things NOT to do after applying for a mortgage: Follow these 6 important rules
Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.
Here’s a list of things you shouldn’t do after applying for a mortgage.
- Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank/Lender: Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
- Don’t Make Any Large Purchases Like a New Car or Furniture for Your Home: New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage.
- Don’t Co-Sign Other Loans: When you co-sign, you’re obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.
- Don’t Change Bank Accounts: Remember, lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.
- 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 impacted. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.
- Don’t Close Credit Accounts: Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.
Questions about buying or selling a home in Beaverton? Contact Donna Meeuwsen at 503.583.3200 or email email@example.com