Congratulations! You’ve decided to purchase a home in South Carolina, and now you need a mortgage. Take a deep breath. It’s not every day you apply for a loan with this many zeroes. After all the hard work and preparation you have done searching for a home and applying for a mortgage, you don’t want to do anything to jeopardize your loan approval. After applying for a mortgage, it is critical not to do any of the things listed below until you have the keys to your new home in your hands!
Refrain from changing jobs: Your loan officer will ask you to verify your income throughout the process. If possible, avoid becoming self-employed or changing from salary to commission during this time.
Refrain from depositing cash into your bank accounts: Lenders are interested in sourcing your money, and cash is not easily traceable. Before making any deposits into your accounts, consult with your loan officer about the proper documentation you will need for your transactions.
Refrain from making large purchases such as buying new furniture or a car: Adding new monthly bills affects your debt-to-income ratio. In the lender’s eyes, this makes for riskier loans, and in some cases, qualified borrowers will no longer qualify if their debt increases.
Refrain from co-signing other loans for anyone: You become responsible when you co-sign, and this also creates a higher debt to income ratio. Even if you are not making the payments, the lender will still count the new debt against you.
Refrain from changing bank accounts: Always keep in mind that lenders need to source and track your assets. Tracking is much easier when there is consistency among your accounts. Consult with your loan officer even before transferring money between accounts.
Refrain from applying for new credit: It doesn’t matter whether it’s a new car or a new credit card. Your FICO score will be affected when organizations in multiple financial channels such as auto, mortgage, or credit card companies run your credit report. Low credit scores can affect your interest rate and even your eligibility for approval.
Refrain from closing any credit accounts: Many South Carolina borrowers believe that having less available credit reduces their risks, and if they close some accounts, they are more likely to be approved. This is wrong! A significant factor of your FICO score is the length and depth of your credit history, not just your payment history.
Any changes in assets, credit, or income should be reviewed and handled in a way that ensures you’ll be approved for your home loan. The best way is to be transparent and discuss any plans with your trusted South Carolina loan officer. These experts are skilled in guiding you through the process and increasing your home loan approval chances.