Don’t Make These Mistakes After Applying for a Mortgage

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Jan 21

Written By Rachael Dressler - Sonoma and Marin County Realtor

Don’t Make These Mistakes After Applying for a Mortgage — So, you just applied for a mortgage. Congratulations! You will want to be careful during the mortgage process so that you don’t put your loan in jeopardy. Don’t make the following mistakes.

1. Don’t Make Large Deposits:

Lenders want to know where your money comes from, and cash isn't the easiest to trace. Before depositing any cash, chat with your loan officer about the right way to document those transactions.

2. Hold Off on Big Purchases:

It's not just home-related stuff; any significant purchases can raise eyebrows for lenders. They look at your debt-to-income ratio, and new debts can mess that up. So, resist the urge to splurge on furniture or appliances.

3. Say No to Cosigning:

Co-signing for someone else's loan means you're on the hook for it too. This adds up in your debt-to-income ratio. Even if you're not the one making payments, lenders will count it against you.

4. Don’t switch to a New Bank:

Keep things simple for lenders by not switching bank accounts. Consistency is key when they're sourcing and tracking your assets. If you're thinking of moving money around, talk to your loan officer first.

5. Hold Off on New Credit:

Whether it's a credit card or a new car, applying for new credit affects your FICO® score. Lower scores might impact your interest rate and even your eligibility for the mortgage. So, hold off until after you've got the keys to your new place.

6. Don't Close Any Credit Card Accounts:

Some think closing accounts makes them less risky, but that's not the case. Your credit score considers the length and depth of your credit history. Closing accounts negatively affects these aspects of your score.

7. Communicate with Your Lender:

Keep your lender in the loop about any changes in your income, assets, or credit. If there are blips in your financial world, talk to your lender about it. Transparency is key to ensuring your home loan still gets the green light.

In a nutshell, you want your home-buying journey to be smooth. So, before you make any big moves or purchases, have a chat with your lender. They're the experts who can guide you on how your financial decisions might impact your dream home. Let me know if you've got any questions or need more info!