While knowing how to get approved is certainly important, knowing what not to do is just as critical. What are some deal-killers when it comes to mortgage approval?
Don’t Switch Careers
When you applied for a home loan, you also provided copies of your pay check stubs and you’re W2s. if you decide to change careers and move to a completely different industry, you put your approval in peril. Another killer? Don’t quit your job and become self-employed. If you do, you’ll have to wait at least two more years for a home loan.
Don’t Move Funds
While its’ common to transfer money from a savings account to a checking account, moving large sums of money around to different accounts will slow your approval. Lenders must document each deposit made and account for them, too many moves and your loan application will be affected.
Don’t Charge Things
That boat you wanted? That new car that just arrived at the dealership? It’ll have to wait. Taking on new debt can affect your debt to income ratios. Too much new debt and you may no longer qualify for your home loan.
Don’t Think About Charging Things
If you’re thinking of opening up a new credit account, don’t. Don’t even apply for it, whether or not you even accept the new credit card or automobile loan. Each time you apply for credit, it records an “inquiry” on your credit report. When a lender sees a new inquiry while your loan is being processed, that inquiry will have to be documented before your loan can be approved.
If your brother in law needs a co-signer to buy a new car and you’re the lucky co-signer, don’t. At least not until after your loan has been approved and funded. Even if the car isn’t yours and your name is nowhere on the title, because you co-signed the debt is still counted against you.
Mistakes on a credit report can be annoying but if the mistake doesn’t affect your loan approval, don’t file a dispute with the creditor while your loan is being approved. Like credit inquiries, credit disputes instigated by the consumer are logged by the credit agencies and your loan papers cannot be drawn until the dispute is settled, withdrawn or explained.
So now that you know what not to do, apply for your loan here and then put these tips into practice.