Once you've submitted your mortgage application, it might feel like the hard part is finally over. You've provided your income details, collected all the paperwork, and are one step closer to owning your dream home. But here's the catch—your mortgage approval isn't set in stone yet. There are still some crucial dos (and don'ts) to be mindful of as you wait for that all-important approval letter.
Lenders are meticulous—they don't just evaluate your financial stability at the time of application; they keep assessing it right up until the closing day. A single financial misstep during this period could jeopardize your approval.
Understandably, this process can be nerve-wracking, but knowing what to avoid can help you sail through it smoothly. Below, we'll unpack the top mistakes to avoid after submitting your mortgage application.
Do not change jobs!
A lender's favorite word is stability! Stability includes a consistent employment history, and a job change can often cause loan denial or, at the very least, a delay in processing. If you plan on making a job change, do it before you begin the mortgage application process or after you close. Remember that lenders generally require you to be at your job for at least two years to qualify for a loan.
Do not make any large purchases!
A mortgage lender will pull your credit report at different stages of the loan process: when you first apply and before closing. Making large purchases between these stages could change your debt-to-income ratio and affect your ability to close the loan. So, no new cars or appliances until after you close your home!
Do not apply for new credit, and don't close any credit accounts!
During the mortgage process, your credit score is subject to change. New credit applications can lower your score, and closing existing accounts can also negatively affect you. So again, no new cars or credit cards until after you've closed on your home!
Do not change your bank account!
Lenders like to see stability in your bank account, so resist the urge to close or open any new accounts while you go through the mortgage process.
Do not make large deposits!
Depositing a large sum of money into your bank account can cause concern for lenders. If you have a windfall, such as an inheritance or a tax refund, speak to your lender beforehand to find the best way to handle it.
Do not co-sign any loans!
Co-signing a loan for someone else can affect your debt-to-income ratio and may cause problems with your mortgage loan. So, if possible, avoid co-signing any loans while you're in the middle of the home loan process.
Applying for a mortgage is a milestone, and feeling eager to move ahead with your home-buying plans is understandable. However, staying financially consistent and avoiding these common mistakes will help ensure a smooth path to securing your dream home.
Remember, every decision and action you take during this time could influence your lender's trust in your financial reliability. You'll soon cross the finish line towards homeownership by practicing patience and sticking to a "steady as she goes" approach.
Have real estate questions? Give me a call, and I'd love to help! John Gorden (928) 308-0101
