Applying for a Mortgage: Important Things to Know
Applying for a Mortgage: Important Things to Consider
Once you’ve found your dream home and applied for a mortgage, there are some key things to consider before you move. It’s exciting to start out pondering taking possession and decorating your new place, but before you create any large purchases, move your money around, or make any major life changes, make sure to consult your lender – someone who’s qualified to clarify how your financial decisions may impact your home equity credit.
Here’s a list of stuff you shouldn’t do after applying for a mortgage. They’re all important to grasp – or just good reminders – for the method.
1. Don’t Deposit Cash into Your Bank Accounts Before Speaking along with your Bank or Lender.
Lenders must source their money, and cash isn’t easily traceable. Before you deposit any amount of money into your accounts, discuss the correct process to document your transactions along with your loan officer.
2. Don’t Make Any Large Purchases sort of a New Car or Furniture for Your Home.
New debt comes with new monthly obligations. New obligations create new qualifications. Higher debt-to-income ratios are common to people with new debt. Since higher ratios bring riskier loans, qualified borrowers may find themselves now not qualifying for their mortgage.
3. Don’t Co-Sign Other Loans for Anyone.
When you co-sign, you’re obligated. thereupon obligation comes higher debt-to-income ratios still. whether or not you promise you won’t be the one making the payments, your lender will need to count the payments against you.
4. Don’t Change Bank Accounts.
Remember, lenders have to source and track your assets. That task is way easier when there’s consistency among your accounts. Before you transfer any money, speak together with your loan officer.
5. Don’t Apply for brand new Credit.
It doesn’t matter whether it’s a replacement Mastercard or a replacement car. after you have your credit report surpass organizations in multiple financial channels (mortgage, Mastercard, auto, etc.), your FICO® score is going to be impacted. Lower credit scores can determine your rate of interest and possibly even your eligibility for approval.
6. Don’t Close Any Credit Accounts.
A serious component of your score is your length and depth of credit history (as against just your payment history) and your total usage of credit as a percentage of accessible credit. Closing accounts contains a negative impact on both of these determinants of your score.
Any blip in income, assets, or credit should be reviewed and executed in an exceedingly way that ensures your home equity loan can still be approved. If your job or employment status has changed recently, share that together with your lender moreover. the simplest plan is to totally disclose and discuss your intentions together with your loan officer before you are doing anything financial in nature.