You’ve done everything right: you’ve saved for a down payment, built up your credit, and now you’ve just signed the paperwork to purchase a new home.  Congratulations!  Now it’s time to switch gears and concentrate on what not to do to make sure the purchase goes smoothly when it comes to financing.

  1. Don’t change or quit your job before or during the loan process. Your mortgage lender wants to confirm job stability as well as your reliability of income, so changing jobs before you close on your new home raises red flags.  Wait until after closing to make a career change.
  2. Don’t buy or lease a new car. There are three major categories that lenders look at when approving you for a loan: your credit, your assets, and your debt-to-income ratio. Purchasing or leasing a new vehicle can affect all three of these categories.
  3. Don’t change banks. Everything that is verified at the beginning of the loan process is also re-verified just before closing. Changing banks during this time just creates more time spent and paperwork for you and your lender.
  4. Don’t apply for a new credit card or go on a spending spree. New inquiries for credit raise major red flags to lenders.  Since new credit translates into a higher risk to the lender, it is best to wait until after closing before establishing new credit or making any unnecessary major purchases.
  5. Don’t co-sign a loan for anyone. Even though you’re not making the payments for this loan, it’s a risky financial move as your lender would have to factor these potential other loan payments into your debt-to-income ratio.
  6. Don’t get behind on bills. Paying your bills on time is a track record of responsibility, so skipping a bill or having to make a late payment strongly affects you being able to secure a mortgage loan.
  7. Don’t think you’re alone. If you’re working with a realtor like me, we can take a lot of the burden off of you by offering you advice and communicating with your lender to make things run as smoothly as possible.

Disclaimer: This post is for informational purposes only.  Please seek advice from a qualified financial professional if you are looking to secure a new mortgage.