Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
EXPECT MORE
Once you’ve applied for a mortgage, there are some key things to keep in mind.
While it’s exciting to start thinking about moving in and decorating, be careful
when it comes to making any big purchases
Here’s a list of things you may not
realize you need to avoid after applying for your home loan.
1. Don’t Deposit Large Sums of Cash
Lenders need to source your money, and cash isn’t easily traceable. Before
you deposit any amount of cash into your accounts, discuss the proper way to
document your transactions with your loan officer.
2. Don’t Make Any Large Purchases
It’s not just home-related purchases that could disqualify you from your loan.
Any large purchases can be red flags for lenders. People with new debt have
higher debt-to-income ratios (how much debt you have compared to your
monthly income). Since higher ratios make for riskier loans, borrowers may
end up no longer qualifying for their mortgage. Resist the temptation to make
any large purchases, even for furniture or appliances.
3. Don’t Co-Sign Loans for Anyone
When you co-sign for a loan, you’re making yourself accountable for that
loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well.
Even if you promise you won’t be the one making the
payments, your lender will have to count the payments against you.
4. Don’t Change Bank Accounts
Remember, lenders need to source and track your assets. That task is much
easier when there’s consistency among your accounts. Before you transfer any
money, speak with your loan officer.
5. Don’t Apply for New Credit
It doesn’t matter whether it’s a new credit card or a new car. When you have
your credit report run by organizations in multiple financial channels (mortgage,
credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores
can determine your interest rate and possibly even your eligibility for approval.
6. Don’t Close Any Accounts
Many buyers believe having less available credit makes them less risky and
more likely to be approved. This isn’t true. A major component of your score is
your length and depth of credit history (as opposed to just your payment
history) and your total usage of credit as a percentage of available credit.
Closing accounts has a negative impact on both of those aspects of your score.
Bottom Line
You want your purchase to go as smoothly as possible. Remember, before you make
any large purchases, move your money around, or make any major life changes, be
sure to consult your lender – someone who’s qualified to explain how your financial
decisions may impact your home loan.
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures
your home loan can still be approved. If your job or employment status has changed recently,
share that with your lender as well. The best plan is to fully disclose and discuss your intentions
with your loan officer before you do anything financial in nature.
These tips are designed to help first-time homebuyers avoid surprises when applying for a home loan. Need more information? Contact me for details. I am here to help! Judy
:...Let your next purchase be an inspired one!...
908 803-0472
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