Some “Not To” Tips for Home Buyers: What NOT To Do When Applying For a Mortgage
Understanding what you need to do to qualify for a mortgage is very important, but understanding what NOT to do as you are preparing to apply for a home loan or are in the process of obtaining a mortgage is just as important.
Here are some suggestions for home buyers about what NOT to do while in the process of acquiring a home loan:
1. Do not quit your job.
This sounds simple enough, but it’s worth remembering. Quitting your job in the midst of acquiring a home loan can jeopardize your chances of being approved for the mortgage.
2. Do not take on new credit during the mortgage process.
If you open up a new credit card or auto loan or any other type of loan, you will have to re-qualify your DTI (Debt-To-Income) ratio. This can slow down the loan approval process as the bank has to re-evaluate your financials. It might also put you over the credit limit, causing you to become disqualified for the loan.
3. Do not close certain accounts on your credit report.
FICO (Credit Score Company) weighs your credit score based on active/healthy trade lines. If you have three trade lines and then decide to close 2 credit cards before getting your credit pulled it can hurt your score dramatically!
4. Do not deposit unsourced funds into your bank account.
Banks want to see money in the bank. One thing that banks will not allow is a large deposit in the bank that is not “sourced.” If you have cash at your house and then decide to deposit it during the same month you apply for a mortgage, the bank will want you to explain where that deposited money came from.
More Tips On What NOT To Do When Buying a Home
For more information about what NOT to do when applying for a mortgage, check out our page about 8 Common First Time Home Buyer Mistakes (And How To Avoid Them).
Ready to get the home buying process started? Looking for some guidance to make sure that the mortgage application and approval process goes as smoothly as possible? Contact Maple Tree Funding at 518-782-1202! As a trusted NY mortgage broker, we can help you find the home loan that’s right for you and your budget! Contact us today!