Applying for a mortgage is an exciting step toward owning your own home. However, there are certain actions you should avoid to ensure the process goes smoothly. Here are key things to steer clear of after applying for a mortgage:
1. Don’t Change Bank Accounts
Stability is crucial during the mortgage approval process. Changing bank accounts can complicate things and cause delays. Lenders want consistent financial behavior, so keep your existing accounts stable until after closing.
2. Don’t Apply for New Credit or Close Accounts
Applying for new credit can affect your credit score and raise questions about your financial stability. Similarly, closing accounts can also negatively impact your credit score by reducing your available credit and changing your credit utilization ratio. Avoid making any changes to your credit profile until your mortgage is finalized.
3. Don’t Make Large Purchases or Transfers
Large purchases or significant money transfers can deplete your savings and alter your debt-to-income ratio, a critical factor for lenders. This can jeopardize your mortgage approval. Hold off on major expenses until after your mortgage is secured.
4. Don’t Co-Sign Loans
Co-signing for someone else’s loan means taking on additional financial responsibility. This can increase your debt load and impact your credit score, which could affect your mortgage approval. Avoid co-signing any loans until your mortgage process is complete.
Following these guidelines will help ensure that your mortgage application remains on track and you can smoothly transition into your new home.
Source: Keeping Current Matters
