Recently applied for a mortgage? Here's what you should avoid!
So you've taken the plunge and applied for a mortgage. Congratulations! Buying a home is a huge accomplishment. But before you start shopping for new furniture and making plans for your housewarming party, there are a few things you need to avoid doing. In the meantime, here are five things to avoid doing after you've applied for a mortgage.
1. Don't Deposit Large Sums of Cash Before Speaking With Your Lender
If you receive a large sum of money as a gift or inheritance, resist the urge to deposit it into your account before speaking with your lender. Why? Because lenders need to verify the source of your funds, and if you deposit a large sum of cash without letting them know first, it could delay the loan process. So instead of depositing that money into your account, hold onto it until you've had a chance to speak with your lender about it.
2. Don't Make Any Large Purchases
Similarly, you'll want to avoid making any large purchases—like buying a new car—after you've applied for a mortgage. Why? Because when lenders pull your credit report (which they do as part of the loan approval process), they'll see any new debts that you've taken on and this could lead them to question your ability to repay the loan. So if you can, wait to make any big purchases until after you've closed on your mortgage.
3. Don't Co-Sign Another Loan
If someone asks you to co-sign a loan—for example, a student loan or an auto loan—resist the urge to say yes. That's because by co-signing another loan, you're essentially taking on another debt obligation—and this could impact your ability to qualify for a mortgage. If you absolutely must co-sign a loan, be sure to let your lender know about it beforehand so they can take it into account when reviewing your application.
4. Don't Switch Bank Accounts
Throughout the mortgage process, you'll need to provide your lender with various financial documents—like bank statements and pay stubs—to show that you have the income necessary to repay the loan. So if you switch bank accounts during this time, it could complicate things and delay the loan process. To avoid any issues, open any new accounts well in advance of applying for a mortgage—and be sure to keep track of all account statements and documents that you'll need to provide to your lender.
5. Do Consult With a Realtor
One final note: even though there are certain things you should avoid doing after applying for amortgage, there is one thing you should do — consult with a Realtor. A good Realtor will be able help you navigate the homebuying process, from start to finish, and ensure that you find the right home for your needs and budget. So if you're not sure where to start, don't be afraid to reach out!
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