REAL ESTATE NEWS! Avoiding common mistakes after submitting your mortgage application
As you embark on the exciting journey of buying a home, it’s natural to envision the future and the joy of making it your own. However, before you get too carried away with emotions, it’s crucial to keep certain key considerations in mind after applying for your mortgage and before reaching the closing stage. Here’s a comprehensive list of things to bear in mind during the home loan application process:
1. Avoid Depositing Large Sums of Cash
Lenders require traceable sources for your money, and cash transactions can be challenging to trace. Before depositing any cash into your accounts, consult your loan officer to understand the proper documentation process.
2. Refrain from Making Large Purchases:
Beyond home-related expenses, any significant purchases can raise red flags for lenders. New debts result in higher debt-to-income ratios, impacting loan eligibility. Resist the urge to make substantial purchases, even for furniture or appliances.
3. Avoid Cosigning Loans:
Cosigning makes you accountable for the success and repayment of a loan, contributing to higher debt-to-income ratios. Even if you’re not responsible for payments, lenders will consider them in your evaluation.
4. Maintain Consistency in Bank Accounts:
Lenders prefer consistency in sourcing and tracking your assets. Before transferring funds, communicate with your loan officer to ensure a smooth process.
5. Refrain from Applying for New Credit:
Whether it’s a credit card or a car loan, new credit applications impact your FICO® score. Lower credit scores can influence your interest rate and loan approval. Avoid applying for new credit during this critical period.
6. Avoid Closing Any Accounts:
Some believe reducing available credit lowers risk, but this isn’t accurate. Your credit score considers the length and depth of your credit history and your total credit usage. Closing accounts negatively affects both aspects.
7. Discuss Changes with Your Lender:
Transparency is key. Inform your lender of any changes or anticipated changes, whether in income, assets, or credit. Share recent alterations in job or employment status to ensure your home loan approval remains unaffected.
In conclusion, for a seamless home purchase experience, consult your lender before making substantial financial decisions. Whether it’s large purchases, fund transfers, or significant life changes, your lender can guide you through the process, ensuring your home loan remains on track.
Ready to make a Move?
Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.