Getting pre-approved for a home loan is an exciting milestone on your journey to homeownership. However, it’s crucial to understand that this is merely the starting line, not the finish. The Barry Team Loans has guided countless clients through this process, and we’ve seen firsthand how the actions you take after pre-approval can impact your ability to close on your dream home.
Here’s our expert list of what NOT to do after receiving your pre-approval, to ensure that you stay on track:
1. Avoid Opening or Closing Asset Accounts
Your pre-approval is based on your current financial situation. Opening or closing asset accounts can change your financial landscape, making you appear riskier to lenders.
2. Steer Clear of Fund Transfers Between Accounts
Lenders look for consistency. Transferring funds can raise questions and require additional paperwork, potentially delaying your closing.
3. Halt Any Non-Payroll Deposits
Unusual deposits into your banking accounts can flag money laundering concerns or signal non-disclosed debts.
4. Don’t Change Jobs or Employers
Job stability equals reliability in the eyes of lenders. A career move could hinder the verification process and alter your income stability, affecting your loan terms or eligibility.
5. Resist Buying Furniture or Appliances Pre-Funding
It’s tempting to start decorating your new home, but taking on additional debt affects your debt-to-income ratio and can lead to loan disqualification.
6. Say No to New Credit Lines
New credit inquiries can lower your credit score. Lenders might also question your ability to manage new debt obligations.
7. Ensure On-Time Monthly Payments
Maintaining a solid payment history is essential. A late payment can be a red flag and jeopardize your loan approval.
8. Don’t Co-Sign Loans for Others
Co-signing affects your debt-to-income ratio just as if the loan were solely yours. It could significantly impact your mortgage qualification.
9. Protect Your Down Payment Funds
Your down payment must remain readily available. Spending this money can disqualify you from getting a loan.
10. Postpone Major Purchases, Like a Car
Big purchases can increase your debt-to-income ratio or decrease your cash reserves. Both are critical factors in maintaining your loan approval.
Remember, your pre-approval is contingent on maintaining your current financial status. Any changes, no matter how insignificant they may seem, can affect your loan process. Should life throw you a curveball, such as a necessary job change, consult with your loan officer to clarify how it might alter the mortgage landscape.
The Barry Team Loans is here to ensure that the road from pre-approval to homeownership is smooth. Avoid these common pitfalls, and you’ll be on your way to holding the keys to your new home. If you have questions or need guidance, we’re just a call away. Let us help you maintain the course for a successful home purchase.