Key Things to not do After you Apply for a Mortgage.

Dated: December 27 2021

Views: 27

Key Things To Avoid AfterApplying for a Mortgage | MyKCM

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. They're all important to know – or simply just good reminders – for the process.

1. Don't Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or 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.

2. 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.

3. Don't Co-Sign Other Loans for Anyone.

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.

4. 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.

5. 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.

6. Don't Close Any 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 (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 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. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

  

Blog author image

DJ & Associates - DJ Jenkins

If you're in the market for buying or selling your home, You Need a Great Real Estate Agent! With the right agent by your side, you'll make smarter real estate decisions. Whether you are looking to bu....

Latest Blog Posts

Ask a Real Estate Professional Should You Update Your House Before Selling?

Some HighlightsIf you’re deciding whether you should make updates before you sell your house, lean on your trusted real estate advisor to be your guide.In today’s 

Read More

More Homes Coming to the Market? We Shall See....

According to a recent survey from the National Association of Realtors (NAR), one of the top challenges buyers face in today’s housing market is finding a home

Read More

IS Your home List-Ready? You Might Not need to do Much.

 One of the biggest concerns for a homeowner looking to sell is the time they’ll have to put in before listing their house. If that’s the case for you, you should know – 

Read More

Using Your Tax Refund To Assist in Purchasing A Home This Year

If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For buyers, that might include things like your down payment and closing

Read More