Getting preapproved for a mortgage is an exciting step towards buying a home, but it’s also a delicate phase where certain missteps can jeopardize your final approval. Here are five critical things you should avoid doing after receiving your mortgage preapproval:
1. Increasing Your Debt Adding more debt after your preapproval can significantly affect your debt-to-income ratio, a key factor lenders consider. Purchasing a new car, taking out a large personal loan, or racking up significant credit card debt can lead to a lender reevaluating your financial stability and possibly revoking your preapproval.
2. Changing Jobs Stability is crucial when it comes to securing a mortgage. Changing jobs or becoming self-employed introduces uncertainty in your income, which lenders may view as a risk. If a job change is unavoidable, ensure it’s in the same field with equal or higher pay to mitigate potential concerns from your lender.
3. Missing Credit Payments Keeping up with your existing credit obligations is vital during this time. Missed or late payments can lower your credit score, leading lenders to question your reliability as a borrower. Maintain or improve your creditworthiness by continuing to make payments on time.
4. Ignoring Lender Requests After preapproval, your lender might request additional documentation or clarification on your finances. Failing to respond promptly or adequately can stall the process or affect your loan terms. Always respond quickly and thoroughly to keep things moving smoothly.
5. Making Large Untraceable Deposits Sudden large deposits into your bank account can raise red flags for lenders, who need to source all your funds to comply with anti-money laundering laws. Avoid making untraceable deposits, and be prepared to explain any large sums that appear in your accounts.
By avoiding these pitfalls, you enhance your chances of smoothly transitioning from mortgage preapproval to owning your dream home.
Thanks for reading,
Chris
