How NOT to Derail Your Mortgage Approval

November 6, 2018



Your offer was accepted on the perfect house and your loan request is on the road to mortgage approval.  It's easier than you think to knock the mortgage train off the tracks.  Now is not the time to let your financial guard down.  Here are 5 things to avoid doing until after your close.


1. DO NOT open any new credit.  In other words do not give anyone permission (other than your lender) to run your credit report.  This is not the time to open a credit card to save 15% on your those new clothes you bought. If you're on the cusp of approval just an inquiry by a store credit card could disqualify you from your mortgage approval.


2. DO NOT make any large purchases.  This is not the time to buy a new car or a new bedroom set.  As tempting as it is, avoid buying new furniture until after you close.  New debt or a depletion of your current savings is a red flag to lenders and could disqualify you from getting your mortgage.


3.  DO NOT change jobs or reduce your working hours without consulting with your lender first.  You are expected to maintain current income levels with the same employer(s) until closing.


4.  DO NOT make large, unverifiable deposits.  You'll have to stuff the mattress with any extra cash you receive from that side gig that you don't claim on your taxes and didn't disclose to your lender until after you close.  Lenders are required to verify your deposits.  Large deposits not tied to your paycheck or other documented source should be avoided until after closing.


5. DO NOT enter into a contract to purchase another property without consulting your lender first.  Eyeing an investment property?  It will have to wait until you after you close.


You will likely have to provide updated pay stubs and bank statements along the way so stay in regular communication with your lender about any financial changes.  Lenders don't like surprises.  


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