Your offer has been negotiated and accepted. Contracts have been signed. Your mortgage application has been submitted to your lender.
You are excited. You can picture yourself living in the house. The local furniture store is having a HUGE sale and you see the perfect Living Room set. But wait! Do NOT use your charge card. Do NOT open any lines of credit.
Read below before you have another thought involving your credit.
Here are some credit incidents that can effect your success at getting a mortgage:
Don’t deposit cash into your bank accounts. Lenders need to be able to track your deposits and cash is not really traceable. Small, explainable deposits are fine, but getting $10,000 from your parents as a gift in cash is not. Discuss the proper way to track your assets with your loan officer.
Don’t make any large purchases like a new car or a bunch of new furniture. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher ratios…higher ratios make for riskier loans…and sometimes qualified borrowers are no longer qualifying.
Don’t co-sign other loans for anyone. When you co-sign, you are obligated. See No. 2.
Don’t change bank accounts. As above, lenders need to be able to track money. That task is significantly easier when there is a consistency of accounts. Before you even transfer money between accounts, talk to your loan officer.
Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car, when you have your credit report run too many times, your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
Don’t close any credit accounts. A major component of your score is your length and depth credit history (not just your payment history). Closing accounts can have a negative impact on your score.
The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature.
Any blip in income, assets, or credit should be reviewed and executed in a way to keep your application in the most positive light.
There will always be another sale, but don’t mess up your chances on your dream home!
Pugatch Realty Corp
Five Towns Real Estate Guide