Applying for a home mortgage can be an exciting time! It can also be a stressful time if you run into snags with your loan approval. The process involves inspecting factors such as your credit, income, debt and assets. Because of this, there are several actions you should avoid during the time your loan is being processed.
Whether it’s your first time or tenth, these 7 tips can make or break your loan approval.
- Do not quit or change your job. A stable and consistent source of income is important to lenders. If you start a new job you may not have a pay stub yet for proof of income.
- Do not buy a car or any other big ticket items. As much as those new wheels are calling your name, wait until after closing on your home. It’s best to minimize your financial obligations when asking a lender for money.
- Do not use your credit cards to excess or for large amounts. Increasing your debt will not look good when applying for a loan.
- Do not originate inquiries into your credit. A record is kept for each inquiry and can affect your credit.
- Do not change bank accounts. Changing banks will only complicate things. Maintain consistency from initial application until closing on your home.
- Do not co-sign a loan for anyone else. Simply put, their debt becomes yours.
- Do not omit any debts or other liabilities from your application. These are required on the application for a reason and it is in your best interest to be up front about all necessary information. On top of that, misrepresenting this information can be considered mortgage fraud and there could be consequences.
If you anticipate any big changes during the process, make sure to talk them over with your REALTOR® or loan provider. Bottom line, if you’re not sure, ask. It’s better to be safe than sorry.