Did you know there are some things you should avoid doing before buying that new home? Because you've may have been preapproved for a mortgage, doesn't mean you can change your financial status. Below are some tips to keep you on track:
1. Don't change jobs, become self-employed or quit your job. This could delay the process for closing on a home. Your lender will need proof of employment along with paystubs to confirm your new income.
2. Don't buy a car, truck or van. By depleting your savings or adding a new car loan, this could derail your mortgage application. Wait until after you've moved into your new home.
3. Don't apply for new credit cards. Applying for credit can actually lower your credit score.
4. Don't close any credit accounts. This can also lower your credit score.
5. Don't spend money you have set aside for closing. You will need cash on hand at the closing for the down payment and closing costs. Your lender may even want to veryify your cash reserves so make sure the funds stay in place.
6. Don't fall behind in making payments on accounts. One of the most important elements of your credit score is your history of on-time, in-full payments for all accounts.
7. Don't make large deposits or move money around. Your lender will require the most recent bank statments before going to closing. This might cause you to go above the maximum acceptable debt-to-income ratio.
8. Don't increase your debts. You may think buying new furniture for the new home is a great idea. Actually your debt-to-income ratio is extremely important to a loan approval.
9. Don't omit debts or liabilities from your loan application. This could possibly prevent you from buying that new home and going to closing.
10. Last but not least, do not co-sign a loan for ANYONE!