After working so hard to build up your credit and save for your home’s down-payment, make sure you don’t make these 5 mistakes during your home’s financing process! Any changes to your finances during this time could delay your mortgage closing or even put you at risk of not being approved.
Don’t deposit large sums of cash into your bank account.
Before making any large deposits, it’s best to ask your Loan Consultant how to properly document that money. For example, if someone is generous to gift you funds for your down-payment, you will likely need to provide a gift letter.
Don’t make any large purchases.
You’ll want to avoid making any large purchases regardless of whether it’s in cash or on credit. A large cash purchase will take away from your savings which you’ll need for a down payment and closing costs and a large credit purchase will increase your debt-to-income ratio and credit utilization which are used to qualify—or disqualify—you for a loan.
Don’t change jobs.
When you apply for a mortgage, your lender will verify your employment and income. A change in jobs could indicate instability and may require additional documentation which can slow the home loan process down. If you’re considering changing fields, seeking new employment, or becoming self-employed, it’s best to reach out to your Loan Consultant to understand how that may impact your home’s closing.
Don’t open or close any lines of credit.
You want your credit to remain as stable as possible when applying for a mortgage, especially if you’ve already been pre-qualified. Opening or closing lines of credit can affect your credit utilization, credit history and your debt-to-income ratio. Please inform your Loan Consultant if you need to apply for new credit or close any existing accounts.
Don’t miss any of your current payments.
Your payment history is the largest factor when calculating your credit score. Even one late payment can decrease your credit score to the point where you will no longer be eligible for your new mortgage. If you want to ensure you qualify for your mortgage, make sure you pay all your bills on time!
If you’re ever worried about any of these affecting your home’s financing, reach out to your Loan Consultant as soon as you can. Together, you can figure out a way to best move forward with your new home!
