Avoid These 6 Mistakes After Getting Pre-Approved For a Mortgage

When you’re preparing to buy a home, one of the first things you should do is to get pre-approved for a mortgage. This signals to a seller that you’re a serious buyer that’s more likely to make it to the closing table. But getting pre-approved is just the first step toward homeownership, and there are problems that can potentially happen to derail your mortgage application before you close. These are the mistakes you want to avoid after getting pre-approved for a mortgage.

Missing payments

Missing payments on other bills is a big no-no when you’re applying for a mortgage. Lenders will be looking at your credit history for missed payments to determine how much of a risk you are. Those missed payments can affect your interest rate or worse – make you ineligible for the loan altogether.

Making large purchases

It’s easy to get caught up in the excitement of buying a new home. We know you’re fantasizing about how you’re going to decorate and making lists of all the things you’ll need. But avoid making any large purchases before you close, especially on credit. This affects your debt-to-income ratio, another key factor in determining whether or not you’ll qualify for a loan.

Opening or closing credit lines

Along the same lines as avoiding large purchases, you should also avoid the temptation to get another credit card or a car loan. Your credit score can take a hit. You also shouldn’t close any lines of credit, even if you’ve paid them off. Lenders want to know if you make on-time payments. Closing accounts will make it more difficult for them to determine if you can do that.

Changing bank accounts or jobs

Your lender wants to be able to track where your money is coming from. Changing bank accounts in the middle of closing on your mortgage can make it that much harder for them. In addition, don’t change jobs if you don’t have to. Your lender wants to know that you can afford your mortgage payments. Any changes to your income or employment history can be a big red flag.

Depositing large sums of cash

As we said above, your lender needs to know where your money is coming from. A sudden deposit of cash is a big mistake. They will have no idea where that money came from and may assume you took out more credit. If you absolutely must deposit cash, then talk to your lender first so you can document it properly.

Co-signing a loan

Helping out a loved one in need is a good feeling. But it can also sink your mortgage application. Don’t co-sign for any loans while you’re waiting to close. Your lender knows you’ll be on the hook for those payments should the original borrower default.

Contact the experts at Agent inc.

Are you ready to make your dream of homeownership a reality? Then contact the experts at Agent inc. at 949-791-8160 or [email protected] to get started. Let’s open your world to new possibilities!