10 Mistakes To Avoid While Waiting For Loan Approval
1. Don't Change Banks
You want to maintain a stable banking history.
2. Don’t Consolidate Any Credit Cards
This can wreak havoc on your debt-to-credit ratio and your debt-to-income ratio.
3. Don't Change Your Payment Habits
If you just pay the minimum payment, keep doing that. If you pay 2 weeks early, keep doing that.
4. Don’t Pay Off Any Outstanding Debts
Especially past due collections as this will bring an old derogatory credit reference current which will bring your score down.
5. Don’t Max Out Or Over Charge Any Credit Cards
Hopefully, no explanation is needed here!
6. Don't Make Any Large Deposits Or Deposit Cash
All large deposits (such as gifts from parents), transfers from one bank account to another have to be documented. Contact your lender first before doing so.
7. Don't Make Any Major Purchases or Co-Sign On Any Loans
Very important. Do not make any major purchases. There will be another sale after you close on your home. Making major purchases affects your "debt to income ratio" (which measures how much of your monthly income goes toward debt obligations), a ratio lenders consider when evaluating a loan application. You don't want to end up buying items for a home you don't have. This includes purchasing or leasing cars, furniture, washer/dryer and refrigerator. Don't take on new debt (this includes co-signing on a loan) even if your not the one making the payment. Wait until after you close on your home.
8. Don’t Apply For New Credit Or Close Any Open Credit Cards
This can cause your overall debt-to-available credit ratio to rise and if you have a long standing history of paying that card on time, you are removing that “good” history from your credit report. You can negatively affect your credit status, wait until until your mortgage is secure.
9. Don't Be Late On Your Credit Card Payments Or Charge Excessively
You need to show your are responsibility and can manage your money. Stay current on your bills, you don't want to ruin your credit score before your loan goes through. Any changes to your credit status could affect the likelihood of closing on your new home, so you want to keep your credit in good standing.
10. Don't Change Anything About Your Job, Become Self Employed or Quit Your Job
Lenders prefer a steady and consistent job history. You want to show lenders stability. If you are up for a promotion, discuss this with your lender before accepting because your pay structure could change, i.e. bonuses or commissions could change the way your income is calculated. Changes before closing on a home, could delay the process while your lender re-evaluates your financial position.
Boyce & Co Real Estate Agents deliver the best full service in the business, while still saving you money.
The amount you save depends on the home’s asking price.
Here’s how it works:
- The seller typically pays 3% of the home price for representing you as a buyer
- We contribute part of that money, to your closing costs
Boyce & Co Real Estate also saves you money when selling a home, without the high commission fee.
Lender approval is required. Saving vary and are subject to a mimimum commission, offer subject to change.
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