Some Do's & Don'ts When Applying For A Mortgage

  • DON’T change jobs or voluntarily take a layoff or reduced hours without speaking with your loan officer.

This could potentially mean the difference between an approval and a denial. Make sure you continue working in the same pattern as always. If you must change jobs, call your loan officer BEFORE you do so.  Employment changes hold up closings. You may need to wait until you have a full 30-day’s worth of paystubs available before you will be able to close on a new loan.

  •  DON’T apply for new credit of any kind without speaking to your loan officer.

If you apply for new credit, that company will pull your credit report and this will have an adverse effect on your credit score. Likewise, don’t establish new lines of credit for furniture, appliances, computers, vehicles, etc. as this new debt will have to be factored into your debt-to-income ratios and may affect your qualifications.

  •  DON’T close credit card accounts or consolidate debt from multiple cards to one or two cards without speaking to your loan officer.

If you close a credit card account, it can affect your ratio of debt to available credit. When you close an open account, your total available credit limit is reduced by that amount of credit limit for that card.  By combining card debt, it will also change your ratio of debt to available credit.

  •  DON’T max out or overcharge existing credit cards.

Running up your credit cards is the fastest way to bring your score down even if you never miss a payment.  Try to keep your credit cards below 30% of the available credit limits at ALL times.

  •  DON’T raise red flags to the underwriter, such as:
DON'T co-sign on another person’s loan, or

DON'T change your name or address. 

  • DON’T deposit cash without speaking to your loan officer.

In most cases, cash on hand and unsecured funds are not an acceptable source of funds for down payment or closing costs. Any large or unusual deposits will need to be documented with a paper trail to determine if the source of the funds is acceptable or not. If not, you may not be allowed to use those funds and they will not be counted toward the required monies for closing.

  •  DO stay current on existing accounts

Late payments on your existing mortgage, auto loan, or other credit accounts that can be reported to a Credit Reporting Agency (such as Trans Union) can have serious negative effects on your score.

  •  DO Call Your Loan Officer

If you have any questions about taking any action that you feel could be questioned or have an adverse effect on your credit score, call your loan officer first to see how it may impact your loan process.