Mortgage Mistakes to Avoid After Applying
Don’t Chance loosing your new home – Avoid these mistakes 🚫
Don’t make common mortgage mistakes when buying a home in Metro Detroit – know the key things to keep in mind after you apply for a loan! Before you get too far down the emotional path, remember some key things after you apply for your mortgage and work towards that all-important closing day. Here’s a list of things to avoid after applying for a home loan.
💠 Don’t Deposit Large Sums of Cash
Lenders need to source your money, and cash isn’t easily traceable. Before depositing cash into your accounts, discuss with your loan officer how to properly document your transactions.
💠 Don’t Make Any Large Purchases
It’s not just home-related purchases that could disqualify you from your loan. Any large purchase can be a red flag for a lender. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income. Since higher ratios make loans riskier, borrowers may no longer qualify for their mortgage. Resist the temptation to make large purchases, even furniture or appliances.
💠Big No-No: Co-signing a Loan
When you cosign for a loan, you’re making yourself accountable for that loan’s success and repayment. 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 them against you.
💠Don’t Switch Bank Accounts
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.
💠Don’t Apply for New Credit
It doesn’t matter whether it’s a new credit card or a new car. Organizations running your credit report in multiple financial channels (mortgage, credit card, auto, etc.) will impact your FICO® score. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.
💠Don’t Close Any Accounts
Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A significant component of your score is your length and depth of credit history (as opposed to just your payment history) and your total credit usage as a percentage of available credit. Closing accounts hurts both of those parts of your score.
Do Discuss Changes with Your Lender
Be upfront about any changes that occur or are expected to happen when talking with your lender. Blips in income, assets, or credit should be reviewed and addressed to ensure your home loan remains approved. If your job or employment status has changed recently, share that with your lender. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before taking any financial action. Get the complete list of Do’s and Don’ts During the Loan Process.
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Key Takeaway ~ Mortgage Mistakes to Avoid
You want your home purchase in Metro Detroit to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make significant life changes, be sure to consult your lender.
If you have questions or want to understand the process better, let’s connect.📅 Schedule a Zoom call with me, and we’ll review the data step by step. I’ll share my screen to give you a clear view of market insights so you can make confident, informed decisions about your next steps! ✨If it’s easier, contact me on my cell at 📞248-343-2459, and we can schedule an appointment.
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The information contained and the opinions expressed in this article are not intended to be construed as investment advice. Metro Detroit Home Experts ~ Pam Sawyer does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Metro Detroit Home Experts or Pam Sawyer will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
