What To Do & Not To Do After Getting Pre-Approved For A Mortgage

Getting pre-approved is only the first baby step to buying a home, the following information is a list of what to do and not to do once pre-approved. These tips will likely help you get better financing terms and also avoid self sabotaging your dreams of home ownership.

WHAT NOT TO DO:

1: DON’T TAKE ON NEW CREDIT

  • The bank will run your credit again right before closing.
  • New credit inquiries will drag down your credit score and will also have to be explained. If new credit is extended the new payment will have to be verified and your debt to income ratios will have to be readjusted for the increased debt.

2: DON’T INCREASE YOUR DEBTS

  • Big purchases can hurt your chances of closing.
  • Using cash will deplete your cash reserves which may be a factor within your approval. Making a big purchase on credit will increase your debt & can result in your debt to income ratio becoming inadequate when recalculated.

3: DO NOT RUIN YOUR CREDIT

A pre-approval is based on your credit; income & assets at the time it’s issued.

  • Do not close your accounts
  • Do not miss payments
  • Do not incur credit inquiries
  • Do not increase your credit balances

4: DON’T MAKE LARGE DEPOSITS

All assets have to be paper trailed, for this reason cash can’t be used to close. If you aren’t able to paper trail the money then as far at the bank is concerned the money doesn’t exist.

5: DO NOT CO-SIGN FOR LOANS

  • If you co-sign for someone the debt will be reflected on your credit and the new debt will negatively affect your debt to income ratios.
  • If you can provide canceled checks for a minimum of 12 months that reflect payments coming directly from the account of the co-signer the payment might be able to get omitted.
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6: DO NOT QUIT OR CHANGE JOBS

Your job will be re-verified with your employer right before closing. Obviously if you’re not working your income will be voided. If you’re starting a new job you will need pay stubs to prove the income.

7: IGNORING LENDER REQUESTS

When your Loan Officer requests a document follow their directions. Provide all documents with all pages even if they’re blank as soon as possible to avoid delays.

WHAT TO DO:

  1. Fax or email all requested documents promptly & include all pages even if they’re blank
  2. Save all new pay stubs & Bank Statements in a folder in case they’re needed so they’re readily accessible
  3. Continue to pay all of your debts & loans on time

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