When you are ready to purchase a home, one of the first steps is getting pre-approved for a mortgage. The lender will gather your documents, evaluate your file, and decide on your ability to purchase and at what amount. Once you have been pre-approved, here are four things that you must NOT do.
Do Not Spend the Funds Set Aside for Closing - Once the lender tells you the amount you need for closing, make sure that you have those funds set a side. The lender will verify that you have the funds to close before your actual c losing date. Make sure that you don’t use the money for other things, or it can affect your closing
Do Not Buy Any Big-Ticket Items- While it is tempting to purchase furniture or appliances before closing, resist this temptation! First, opening new lines of credit can impact your score. Second, the lender will pull credit just before closing to make sure that you don’t have new debt. Any change to your credit profile can impact your ability to purchase.
Do Not Change Jobs, Quit or Retire - One of the first things that a lender will do when pre-approving you for a loan is verify your employment. One of the last things that a lender will do before closing is check your employment. So don’t go on leave, quit, or retire before closing. Changing jobs is a little different especially if you are staying in the same profession. A change of jobs may delay your closing but shouldn’t stop it. Check with your lender as to the documentation needed to verify new employment.
Do Not Misuse Your Credit Cards - Use your credit and credit cards wisely which means - not at all. Don’t open new lines of credit, don’t overuse the ones you have. High balances on credit cards can bring down your credit score. Again, lenders review your credit report just prior to closing.
It is important to remember that lenders are looking for stability in your employment, credit, and life. Lenders try to avoid risk when approving loans because this mortgage is
for 30 years. So, remain employed, avoid large purchases, and keep your eye on your credit.
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