Don’t Make These Mistakes After Mortgage Pre-Approval

Once you secure a mortgage pre-approval, you can count on your home loan getting funded. Right?

Most likely, yes – but if your credit conditions change, that might not be the case. To avoid sabotaging yourself, be careful not to make any of the following mistakes after getting pre-approved for a mortgage.

Mortgage prequalification in Utah

Mistake No. 1: Changing Your Employment Situation

If at all possible, wait until after the home loan process is complete before voluntarily quitting your job or switching to a new one. Lenders look for income stability, and any change in employment may put your mortgage pre-approval at risk.

Mistake No. 2: Not Keeping Up with Your Bills

Skipping a bill payment is never a good idea, but doing so in the period between mortgage pre-approval and closing is likely to derail your home loan. Missed bills can cause your credit score to drop, and that can lead your lender to deny you financing.

Mistake No. 3: Opening New Credit Accounts

Whether or not you put them to use, new credit accounts raise red flags to mortgage lenders. New accounts can affect your credit score – and taking on extra debt now puts you at a perceived greater risk for home loan non-payment.

Mistake No. 4: Making Large Purchases with Credit

Don’t be tempted to use one of the credit cards you already have to buy furniture or appliances for your new home. That might seem like a smart plan, but the resulting change in your debt-to-income (DTI) ratio will cause your lender to reevaluate your mortgage.

Mistake No. 5: Reducing Your Debt Obligations

Paying off an old credit account or loan may help put you on a more solid financial footing, but hold off until after your mortgage closes. Your lender may question where you got the money, and the effect on your DTI ratio may put you below the guidelines for home loan approval.

Mistake No. 6: Co-Signing a Student or Car Loan

Think being a co-signer on a student loan or car loan won’t make a difference to your mortgage? That’s a common assumption, and it’s incorrect. The loan will be considered as a debt for both signers, and can therefore influence the approval or denial of your mortgage.

Mistake No. 7: Making Unexplained Bank Deposits

Getting a bonus from work or otherwise adding to your assets is acceptable, but be prepared to provide documentation of the income source. If your lender can’t verify where you got the money, they may reconsider your home loan approval.

Do you have questions? Intercap Lending, a trusted leader in the Utah mortgage lending industry, can provide you with expert advice on how to avoid making mistakes during the home loan process.

For personalized guidance through mortgage pre-approval and beyond, contact Intercap Lending in Orem, Utah, today.