Your mortgage pre-approval was based on how much money you had in your accounts and how much debt you had. If you spend money now on things like a TV or a new car, it could make it harder for you to get approved for the mortgage. So it’s important that you don’t spend much money between now and your closing date and that you pay all your bills on time from now on.
10 Commandments For A Smooth Mortgage Loan Transaction
I. Thou Shalt Not Change Jobs, become Self Employed or QUIT Your Job(s)
When applying for a loan, it’s best to stay in your current job and steer clear of any self-employed opportunities – that could make moving around your funds look too suspicious.
II. Thou Shalt Not Buy a Vehicle (or you may be living in it!)
Taking out a car loan at this stage might put you in the driver’s seat of an actual car…but not in the financial sense! Delay that purchase until you have closed on your house.
III. Thou Shalt Not Become Late on ANY Payments
Keeping up with your payments is crucial, or else you may find yourself out of the loan process entirely.
IV. Thou Shalt Not Reduce Account Balances Below What You Told/Provided to Your Loan Officer
Don’t let account balances dip below what was listed on the application – it’s kind of like lying to your loan officer, so don’t do it! Unless it’s a credit card balance! In that case, check with your loan officer before paying it down too much.
V. Thou Shalt Not “Forget” to Include All Debts on Application” Write a description for each item
Disclose all debts on the application – otherwise, you’ll get caught in a lie cycle every time someone asks about what happened to that debt you “forgot” to list.
VI. Thou Shalt Not Buy “Big Ticket” Items (>$250)
Big ticket items (>$250) could give away where some of those funds are going and delay closing timelines – wait til after closing! This includes furniture. You may end up with new furniture and no house to put it in.
VII. Thou Shalt Not Apply for Credit Anywhere Until Your Loan is Complete and Closed (credit inquiries count too!)
Credit inquiries outside of this application can knock points off your credit score and cause delays- so hold off until after closing day!
VIII. Thou Shalt Not make “Unusually” Large Deposits Into Your Accounts Without First Consulting with Your Loan Officer
Make sure there is a paper trail if you’re making large deposits into accounts. Otherwise, lenders may get suspicious and think something fishy is going on with your funds (definitely don’t want that).
IX. Thou Shalt Not Close/Open/Change Bank Accounts
It’s wise to keep bank accounts consistent throughout the entire loan process, or lenders may question why things have changed since you filed the initial paperwork.
X. Thou Shalt Not Co-Sign on a Loan for Friends or Family
Co-signing for other loans for friends or family could derail the success of getting your loan approved, so avoid that temptation altogether!
The lender will pull your credit right before closing. Sometimes within hours of your closing. Don’t risk losing your approval by breaking one of the 10 Commandments for mortgage loans.
Step 13 Guide To Buying A Home: Hire Movers & Start Packing