Things to Avoid After Applying for a Mortgage
Once you’ve found the right home and applied for a mortgage, there are some key things to keep in mind before you close on your home. You're undoubtedly excited about the opportunity to decorate your new place, but before you make any large purchases, move your money around, or make any major life changes, consult your lender – someone who will be able to tell you how your financial decisions will impact your home loan. Below is a list of things you shouldn’t do after applying for a mortgage that are important to know – or simply just good reminders – for the process. 1. Don’t Change Jobs or the Way You’re Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well. 2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not easily 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 new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios. Higher ratios make for riskier loans, and then sometimes qualified borrowers no longer qualify. 4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you’re obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you won’t be the one making the payments, your lender will have to count the payments against you.
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