What Not To Do After Qualifying For A Mortgage Loan

Dated: 01/25/2020

Views: 274

What Not To Do After Qualifying For A Mortgage Loan

So you are getting ready to secure a loan for your dream home. Securing the loan is only half the equation: it is important to know that the time between securing the loan (or getting approval) and acutually funding the loan is critical. Here is some advice from Thomas Adam, Attorney with the Adam Law Group.

Finding a lender is probably the most important step in the home buying process. Shopping for a house knowing that you have been pre-approved for a certain amount gives both the buyer and seller a sense of security. Unfortunately, some new homebuyers do not realize that getting pre-approved for a mortgage loan does not guarantee that the bank will pay the seller at closing. Making certain financial choices after being prequalified can drastically decrease your chances of having your loan funded. Knowing what not to do after qualifying for a mortgage loan can help a homebuyer avoid a pre-closing financial disaster.

Quit or Change Jobs

No matter how you feel about your job, managers, or coworkers, do not quit your current job and acquire a new one. During your mortgage application, your prospective lender used your employment history to qualify you for the loan. Even if your income does not change, getting a new job could affect your lender’s faith in your ability to repay the loan. There are times when obtaining a job with a higher salary or transferring to a new position at the same company will not affect your pre-approval, but it is always best to tread carefully and avoid making any decisions that could cost you the home of your dreams.

Open New Credit Accounts

Acquiring new debt is the last thing you want to do while purchasing a house. Lenders perform a second credit check before approving your loan, meaning they will see any  newly opened accounts. If the lender sees one new inquiry, closing will probably go smoothly, but if they see a new line of credit, things could get complicated. Lenders may question your reason for getting more debt and wonder if borrowed money is being used to purchase the home. The new line of credit may also damage the buyer’s credit score, leading to a higher interest rate.

Make Large Financial Transactions

During the home buying process, lenders will scrutinize every financial decision that the potential borrower is making. Anytime money is moved in large quantities, the lender will want an explanation. Avoiding certain large transactions such aspaying off a debt, using a large amount of saved money to purchase a vehicle or appliances, and any money movement that will deplete cash reserves. Waiting until the property purchase is final before making any transactions is the best way to ensure a loan is funded.

Blog author image

Denise Rhodes

With 30+ years as an executive for 2 major companies, I bring professionalism, integr....

Want to Advertise on this Site?

Latest Blog Posts

Spring Worthy Cocktails To Enjoy

It's time to start enjoying the long days, and what better way than to have a delicious cocktail in hand? The return of spring brings with it a new crop of bright, fresh drinks. From updated takes

Read More

Repaint Cabinets For An Instant Kitchen Facelift

Repaint Cabinets for an Instant Kitchen FaceliftLooking for an inexpensive update to your kitchen? Check out these tips. If your kitchen cabinets have seen better days, a fantastic weekend DIY

Read More

What Not To Do After Qualifying For A Mortgage Loan

What Not To Do After Qualifying For A Mortgage LoanSo you are getting ready to secure a loan for your dream home. Securing the loan is only half the equation: it is important to know that the time

Read More

GREAT VACATION IN IRELAND

I don’t know about you, but whenever I start thinking about wanting to take a vacation someplace unique and fun, I am overwhelmed by options.  Do I want an adventure with lots of physical

Read More