So, you found your dream home and applied for a mortgage – now what? We had a chat with Loan Consultant Gerald Annuzzi (NMLS#1749994) of LoanDepot, the number one retail lender in volume per Scotsman Guide, and here are the 7 Don’ts After Applying for a Mortgage:
1. Don’t make any large purchases like a new car or furniture. These purchases come with new debt which means higher debt ratios which can result in a riskier loan and may change your qualifications.
2. Don’t co-sign other loans for anyone. You become obligated for that loan and again that obligation comes with higher debt ratios.
3. Don’t switch jobs. Income, history and job stability are all analyzed during the underwriting process, so any change can negatively impact your mortgage approval.
4. Don’t apply for new credit. Even a new credit card is a no at this time. It affects your FICO score. Lower credit scores can determine your interest rate and even your eligibility for approval.
5. Don’t close any credit accounts. Many people feel having less available credit will make them less risky when in reality a major component of your score is based on your length, depth of credit history and your total use of credit as a percentage of available credit. Closing accounts has a negative impact on these.
6. Don’t change bank accounts. Lenders need to source and track assets. It’s significantly easier with a consistency of accounts.
7. Don’t deposit cash into your bank accounts. Small, explainable deposits are fine, but a $10,000 gift from your parents is not. Lenders need to source your money and cash is not always traceable.
For more information or help, contact The Michele Klug Team today at 908-672-2055. We work with many professionals who can help!