So you’ve just been pre-approved for a mortgage. Congratulations on completing the first step of your home buying journey!
Although this is great news, you still need to take steps to maintain your current financial status between pre-approval and closing on your new home.
More specifically, there certain things you should NOT do after applying for a mortgage. The key is to keep your financial records status quo as making modifications in any direction can quickly change a pre-approval to declined, or delay your closing.
Do Not Make Any Large Purchases or Apply for New Credit
Buying a new home is exciting. You may be thinking about buying new furniture or appliances. Or the flat screen that’s on sale would look great in your new living room.
As tempting as it can be to start outfitting your new place, hold off on any new purchases – cash or credit – until after closing.
Do Not Pay Off Charges or Collections
This might sound counterintuitive and you might be wondering how paying off debt could possibly hurt your financial picture.
Since you were pre-approved on a specific credit profile you don’t want to do anything that could change your debt to income ratio (DTI).
So unless your Metro Detroit home lender has specifically advised you to pay off a balance, refrain from paying off charges or collections.
Do Not Cancel Credit Cards
Another common misconception among buyers is that closing low or zero balance credit cards can only help their financial picture.
However, open accounts with available credit may be working in your favor when it comes to lenders evaluating your credit card utilization.
Do Not Change Employment
A career change could adjust your income as well as the amount you’re approved to borrow.
This might be out of your control, but if possible don’t actively change jobs after you apply for a loan.
Do Not Change Bank Accounts
Unless you want to delay your closing, do not make any changes with your financial institutions.
Part of the documentation you provided for your pre-approval was bank statements. Your bank statements not only indicate you have enough funds for closing and down payment, they also show the length of time that funds have been in your account.
Changing banks may require you to provide a new set of statements right before closing or you may need to wait an additional period of time to show consistent funds being deposited in the new account.
About Metro Detroit Mortgage Lender, Julie Krumholz
Julie Krumholz, is an Metro Detroit home lender at Superior National Bank. With over 35 years in the mortgage industry, Julie’s goal is to provide the best possible mortgage experience and the most competitive rates. Julie has vast experience in FHA loans, VA Loans, USDA loans, portfolio loans, MSHDA loans and more.
