Luke Chamberlin

NMLS#: 12469

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Phone: 201-882-8294

Finding a new home to buy can be very exciting! However, there are some precautions you should be making when applying for a mortgage. To make the process less stressful, we mapped out some key things to avoid to ensure that the process runs as smoothly as possible. Always consult with your loan officer before making any significant changes that could affect your credit and possibly change your original qualifications. Here are seven different highly-suggested changes that you should avoid:

  1. Refrain from any changes to your annual income. Consult with your loan officer since they need to be able to track the source and amount of your income.
  2. Try to keep away from depositing cash into your accounts. The lenders you work with also need to source your money through an efficient and effective way. Consult with your lender to figure out the proper way to do this considering that cash is hard to trace.
  3. Steer clear from ANY large purchases. It can get very exciting buying new furniture and other decorations for your new home, but all of it adds up very quickly. This new debt, on top of your new monthly payments and obligations, can result in high debt-to-income ratios. High ratios mean riskier loans. If you were once previously qualified, you may no longer qualify due to the ratio difference.
  4. Do not co-sign any other loans. Co-signing for other people means you will be obligated even if you are not the one making the payments.
  5. Avoid changing bank accounts. Again, your lenders and loan officer need to source and track your assets and this makes it easier on them to do so. Talk it over with them before doing any sort of transfers from one bank to another.
  6. Abstain from any new credit even if it is a new credit card. When you have your credit run by several different financial channels, for example: mortgage, auto, or credit cards, your credit score will be affected. This usually leads to lower credit scores which can impact the interest rate you would originally receive and eligibility for approval.
  7. Also, do not close any credit accounts during this process. Even though it may seem that with less credit you are not as risky in the lender’s eyes, it actually fails to do so. A significant part of your credit score comes from your credit history and proving that you have been making payments on time for the course of a long period helps.