Five Things To Avoid After Applying For A Mortgage
So you applied for a mortgage (congratulations!) and you are wondering if there are things you should avoid doing until the process is finalized. The short answer is yes, and below we have listed five things for you to review and (hopefully) avoid doing. Let’s dive in:
1.It is so important to ensure your bills are paid on time and to not to miss any credit card and/or loan payments. Why you ask? Well when it comes to your credit score, payment history is one of the most important factors. It can really hurt you if you show late/missed payments on credit accounts.
2. While this next one can potentially be out of your control, you don’t want to actively switch jobs during the loan-approval process. Doing so could lead to income adjustments and thus revisions to the total amount of money you are ultimately approved for.
3. Applying for new credit is another big no-no. Knowing your credit can be pulled at any time until the loan is finalized, you want to steer clear of anything that can negatively impact your score. Opening new lines of credit can have negative impacts on your score and further debt accumulation can increase the debt-to-income ratio (which lenders don’t want to see).
4. Avoid making large deposits without a paper trail as this can indicate newly borrowed money to a loan underwriter, which in turn could read as an increase to your debt-to-income ratio. Any large sum of money that is deposited should have a clear explanation.
5. Steer clear of large purchases after applying for a mortgage. Doing so could either lower your savings amount if paying cash, or increase your credit utilization and debt-to-income ratio. Hold off on furniture and appliance shopping until after the mortgage is finalized.
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