Applying for a Home Loan? Don’t Do These Things!
Buying a home is a long process – sometimes taking months. When you decide you’re ready to buy a home, you’ll (hopefully) examine your own finances closer than you ever have before – because your mortgage underwriter will be looking at your finances even more closely. It’s the underwriter’s job to evaluate your income, credit score and assets to make sure you’re a solid loan candidate. Once you complete the application and begin the mortgage process it’s important to keep your finances as similar as possible until closing. While you’re waiting to close, avoid doing these things to limit any bumps in the road.
- Don’t change employers, quit your job, or become self-employed when you are applying for a home loan.
- Don’t take on additional long-term debt, such as buying a car or furniture for your new home. Additional financing will increase your debt-to-income ratio.
- Don’t increase your use of credit cards or fall behind on any payments.
- Don’t change financial institutions. You want to show stable banking history.
- Don’t spend down your savings or investment accounts.
- Don’t make large deposits into your accounts. Money for your down payment should be in your account for at least two months.
- Don’t neglect any debts or liabilities or misrepresent your income on your loan application.
- Don’t apply for new credit or open new lines of credit, including new credit cards.
- Don’t co-sign a loan for anyone during this time.
In general, don’t do anything that will have a significant impact on your finances. While some things in life can’t be changed, like illness, job loss and natural disasters, your personal finance habits can be monitored and can hurt your chances for mortgage approval if not handled correctly. When you’re going through the mortgage process, it’s important to keep your finances steady and similar to what you’ve included on your application. Any changes – good or bad – can extend the mortgage timeline and possibly keep you from getting your dream home. If you anticipate any big, unavoidable changes during the underwriting process always make sure to talk them over with your Palisades CU Home Loan Expert.
Feel At Home With A Home Loan From Palisades CU!
At Palisades Credit Union, we strive to help our Rockland County members finance the home of their dreams. We understand that finding the right home and mortgage sets a solid foundation for successful homeownership. Whether it’s your first home or a refinance, our representatives will walk you through all the steps.
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