Key Things To Avoid After Applying for a Mortgage

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 LineAny 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.

MORE

Thank You for All of Your Support

MORE

When a House Becomes a Home

It’s clear that owning a home makes financial sense. But lately, the emotional side of what drives homeownership is becoming increasingly important.No matter the living space, the feeling of a home means different things to different people. Whether it’s a familiar scent or a favorite chair, the feel-good connections to our own homes can be more important to us than the financial ones. Here are some of the reasons why.1. Owning your home is an accomplishment worth celebratingYou’ve put in a lot of work to achieve the dream of homeownership, and whether it’s your first home or your fifth, congratulations are in order for this milestone. You’ve earned it.2. There’s no place like homeOwning your own home offers not only safety and security but also a comfortable place where you can simply relax and unwind after a long day. Sometimes that’s just what we need to feel recharged and truly content.3. You can find more space to meet your needsWhether you want more room for your changing lifestyle (think: working from home, dedicated space for a hobby, or a personal gym) or you simply prefer to have a large backyard for entertaining, you can invest in a home that truly works for your evolving needs.4. You have control over renovations, updates, and your styleLooking to try one of those decorative wall treatments you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Maybe you want to create an entire in-home yoga studio. You can do all of these things in your own home.Bottom LineWhether you’re a first-time homebuyer or a repeat buyer who’s ready to start a new chapter in your life, now is a great time to reflect on the non-financial factors that turn a house into a happy home.

MORE