Margaret Hobbie

For the Next Chapter of Your Life
Call me today at (607) 257-0800 Licensed Associate Real Estate Broker, Howard Hanna Real Estate Services

Here is a list of seven things you should not do after applying for a mortgage!  Some may seem obvious, some may not.

  1.  Don’t change jobs or the way you are paid at your job.  Your loan officer must be able to track the source and amount of your annual income.  If possible, avoid changing from salary to commission or becoming self-employed during this time.
  2.  Don’t deposit cash into your bank accounts.  Lenders need to trace the source of your money, and cash is not really traceable.  Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
  3. Don’t make any large purchases like a new car or furniture for your new home.  New debt comes with it, including new monthly obligations.  People with new debt have higher debt to income ratios.  Higher ratios make for riskier loans, and sometimes qualified borrowers no longer qualify.
  4. Don’t co-sign other loans for anyone.  When you co-sign you are obligated to repay, and with that obligation comes higher ratios.  Even if you swear you will not be the one making the payments, your lender will have to count the debt against you.
  5. Don’t change bank accounts.  Remember, lenders need to source and track assets.  That task is significantly easier when there is consistency among your accounts.  Talk to your loan officer before you even transfer money between accounts.
  6. Don’t apply for new credit.  It doesn’t matter whether it’s a new credit card or a new car.  When you have your credit report run, your FICO score will be affected.  Lower credit scores can determine your interest rate and maybe even your mortgage approval.
  7. Don’t close any credit accounts.  Many buyers erroneously believe that having less available credit makes them less risky and more likely to be approved.  Wrong.  A major component of your score is your length and depth of credit history (as opposed to just your payment history), and your total usage of credit as a percentage of available credit.  Closing accounts has a negative impact on both those determinants of your score.

Before you make any major purchases, move money around, or make make major life challenges, consult your loan officer to see how your decisions might impact your home loan.  They are there to guide you through the process.

(from Keeping Current Matters, March 13 2019)