By Alisa Aragon-Lloyd, as seen on “New Condo and Guide” magazine, October 16th 2021.
Receiving a mortgage approval is more than having the down payment. Some of the things lenders also consider are your income, employment history, credit history, and property.
So, you have saved enough money for the down payment and you are excited to buy a property. You have spent considerable amount of time looking for the right home, and your mortgage has been approved. However, there are certain things that can affect your mortgage approval.
Most lenders request the credit bureaus are pulled within 30 days of the approval and they might even request a new one between the mortgage approval and funding date, especially when there is a long period between the two.
The following are helpful tips to keep in mind between the time your mortgage is approved and the time you receive the funds of your mortgage.
• Don’t buy a new car or trade-up to a more expensive lease.
• Don’t quit your job or change jobs. Even if it’s a better-paying job, you still are likely to be on a probationary period. If in doubt, call your Mortgage Expert and they can let you know if this may jeopardize your approval.
• Don’t change industries, decide to become self-employed or accept a contract position even if it’s within the same industry. Any changes could definably jeopardize your mortgage approval.
• Don’t transfer large sums of money between bank accounts. Lenders get especially skittish about this one because it looks like you are borrowing money. Be ready to document cash transactions or money movements.
• Don’t delay payment of your bills, even ones that you are disputing. This can be a legitimate deal-breaker. If the lender pulls your credit bureau prior just to the closing and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they will fund. You don’t want to have to scramble to pay off a debt at the last minute or even worse, put your approval at risk!
• Don’t open new credit cards. Just wait until after your funding date.
• Don’t accept a cash gift without properly documenting it – even if this is from proceeds of a wedding. If you have a bunch of cash to deposit before your funding date, give your Mortgage Expert a call before you deposit it.
• Don’t buy furniture on the “Do not pay for XX years plan” until after funding. Even though you don’t have to pay now, it will still be reported on your credit bureau, and will become an issue – especially if your mortgage approval was tight on the debt service ratios to begin with.
Buying a home and getting approved for a mortgage is not meant to be a difficult process. It is important to do your due diligence and know as much as possible and make informed decisions on your path to homeownership. If you are in doubt, it’s always best to give me a call before making a move that could jeopardize your approval.