Congratulations on applying for your mortgage!
You are taking a huge leap toward securing the home of your dreams. As you’re planning and daydreaming about how you’ll decorate, there are certain things you should avoid doing after applying for a mortgage. Before you close on that house, here are seven key things to keep in mind.
Although not common, banks may ask to see where large sums of money came from if they appear in your account. If they suspect something fishy, it could slow down or even stop the loan process altogether. To be safe, it’s best not to deposit large sums of cash into your bank account until after closing on the loan.
Don’t Make Any Large Purchases
Buying a new car or furniture can wait until after you close on the loan. These purchases will show up on your credit report and can cause lenders to think twice before approving your loan. It would be best to hold off on those big purchases until after all the paperwork is signed and done.
Don’t Cosign Loans for Anyone
If someone asks you to cosign a loan, politely decline — at least until after closing on your mortgage application. Any additional debt you take on during this period can reduce the likelihood that your home loan will get approved by lenders, as it will indicate that you don’t have enough money saved up for an emergency fund or that there is too much existing debt in relation to income.
Don’t Switch Bank Accounts
Keep in mind that lenders need consistent financial records when examining applications; switching bank accounts could make them question where money is coming from and going to — so don’t switch bank accounts after applying for a mortgage unless absolutely necessary.
Don’t Apply For New Credit
Do not apply for any new lines of credit while waiting for approval or during closing of the loan because lenders look closely at changes in credit history during this time frame and may reject an application due to added debt or inquiries into other loans resulting from such applications..
Don’t Close Any Accounts
The opposite holds true too – do not close any existing lines of credit either, as this will lower the amount of available credit which could also decrease your chances of being approved for a home loan — even if it looks like a wise financial move overall by reducing interest payments.. Do Discuss Changes with Your Lender No matter what changes occur as you go through the process of purchasing your home, always inform your lender immediately so they can adjust their calculations accordingly – whether it’s changes in income or jobs, unexpected expenses, etc..
As exciting as it is thinking about what color curtains you’ll buy once you finally get into that beautiful house and sign all those papers—take caution! There are several key things to avoid prior to signing those papers – like depositing large sums of cash into one account or making large purchases with borrowed funds—so make sure these activities are avoided while waiting out approval timeframe and during closing procedures. That said, make sure to talk with your lender about any changes before making them – whether it be switching jobs or taking out another line of credit – so they know exactly what is happening throughout process as well! Good luck!