The last thing you want after you are approved for a home loan is to ruin your chances for financing. Your lender will give you a good faith estimate and if anything major changes during the time of that good faith estimate and truth in lending documents until you close, it could affect your interest rate or even if you get the loan at all. Here are five things to stop doing or not to do once you’re approved for a home loan.
#1. Stop using your credit cards.
The lender and underwriting process has looked at all of your credit cards, the balance and how much credit you have left on them. If you go over a certain amount on your credit cards it will adjust the debt to income ratio and could affect your interest rate. It’s just a good idea to stop using them until your home closes.
#2. Don’t make any large bank deposits or withdrawals.
Yes, you will need money for the down payment, earnest money and closing costs and maybe the inspection but you don’t want to make any large deposits other than your typical paychecks. Banks will start to red flag those deposits and assume that you have a different source of income that you didn’t mention before.
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#3. Don’t change jobs.
Even if you’re just changing the position in your current job or changing your job but staying within the industry, any major changes like this could affect your interest rate and your ability to get alone. It’s best to hold off on any changes in the workplace until after the home closes.
#4. Don’t apply for any other loans.
During the time between when you applied for the loan and when it closes, don’t make any large purchases such as buying a car, furniture or taking out other loans such as student loans or home-equity lines. Just wait until everything closes before making any large purchases.
#5. Don’t buy anything large.
Lenders pull your credit when they take into account how much of a risk you are and if you’re buying a lot of large items after you’ve already applied, it may add red flags to your credit and your application. It’s best to keep things minimal, keep things status quo and not make any large withdrawals or purchases until the home closes.
For more information on applying for a home loan in Northern Virginia, Maryland or DC or have questions about different types of loans please contact our office at any time.
More tips for finance: 4 Financial Steps When buying a home