When purchasing a home, your mortgage pre-approval is based on your current financial situation. Between the time you’re pre-approved and the time you close on your home loan, you don’t want your financial situation to change much. Luckily, there are many factors that are entirely within your control.
Here are four things that you’ll want to avoid doing while you’re in the process of financing a home purchase:
1. Taking on more debt. Your pre-approval is based on a number of factors, including your current debt level. Avoid opening any new credit accounts, requesting a credit line increase or co-signing on a loan. As a general rule, you’ll want to avoid taking on any new debt before you close on your home.
2. Changing your job. Sometimes job changes are inevitable, but when you’re preparing to purchase a home it’s important to consider the impact any change may have. Your employment status and the size of your paycheck are one of the factors that your pre-approval is based on.
3. Making a big purchase. Check with your lender before making any big purchase, either with credit or with cash. Wait to purchase furniture and other big-ticket items until after you have closed on your new home.
4. Making late payments. Stay up to date on all of your credit obligations and utility payments. Now is not the time to pay a bill late or overdraft your checking account.
Now that you know what NOT to do, here are two things to make sure you are doing:
1. Respond in a timely manner to all requests from your lender.
2. Document any deposits other than your paycheck into your bank accounts.
Questions about the underwriting process? We have answers! We want to make sure you understand everything that’s going on during the mortgage application process.