You’ve applied for a mortgage, and you’ve been accepted. Your loan is about to go to underwriting, and you’re going to be getting your very own home in no longer than a month. Or, you will as long as you don’t do anything mentioned on this list below. We’ve seen so many people mess up their home loans and not be able to close on a house because of the items listed below. Here is our list of what not to do after you apply for a home loan. Don’t let any of them happen to you!
1) Apply For A Credit Card
Do not apply for any sort of credit cards while you are in the home buying process. From an American Express to a store card from Kohls, Lowes, or Home Depot. Do not apply for any sort of credit cards. This can throw your credit score out of whack, and it can make your entire home loan fall through. To you, it may just be a little credit card, but to the mortgage company/bank, it is another item that you have to pay.
2) Buy A New Car
Your car breaks down two weeks before you’re supposed to close on your home. It’s completely paid for, but you want a new one. So, you go down to the local Toyota dealership and buy yourself a brand new Toyota Sequoia. No big deal right? You’ve got plenty of money to make the new car payments and still pay your mortgage. Unfortunately, the bank doesn’t care. Even though you may think you’ll have enough money, the bank probably won’t think that. To the bank, it’s another debt that may take priority over your house payment in the future and cause you to stop making your house payment. This will almost always kill a mortgage. DON’T BUY A NEW CAR UNTIL AFTER CLOSING!
3) Quit Your Job
Even if you have another job lined up, stay in your current job until after you close on your house. You have to have an income in order to pay for a house. No money equals no house, so if you quit your job, you’re out of luck. You won’t be able to buy a house. Mortgage companies also like to see two years of continued employment – something that quitting your job will obviously hinder.
*Note: We are not mortgage lenders or bank officials of any kind. Please consult a lender or mortgage company before doing anything in the home buying process even if it isn’t mentioned on this list.
4) Don’t Start Using Your Credit Cards Like Crazy
Continue to use your credit cards like you normally would, but do not go overboard. Don’t buy a bunch of stuff at the monthly sale at Belk or buy a bunch of ‘new home’ items on Amazon. Any big purchases are something else you’ll have to pay back, and the bank doesn’t want you to have any more debt with anyone else before your loan closes. Control yourself and keep your spending as normal until your loan closes.
5) Do Not Start Buying Big Ticket Items
Even if you’re not putting purchases on a card, the lender will want to know exactly where that cash you took went and possible even why you took it out of your bank account. Lenders and underwriters only think about whether or not you will foreclose on the property, and if you buy a big ticket item while you’re waiting for your loan to go through, they question what you will do if times are tight and you need to make your house payment. Will you get pressured by the salesman and buy a new couch instead of making your house payment? They need reassurance not.
6) You Are Guilty Until Proven Innocent
What do I mean by that you ask? Lenders will assume you are guilty. That the reason you are doing whatever you are doing is for a bad reason that goes against you purchasing a home. All they think about is how likely you are to stop making the payments on your loan causing them to have to foreclose on your home. They assume that everyone is extremely likely to be foreclosed at first, and you then have to prove that you are not likely to get foreclosed on through the loan process. If you assume this is how it will be going into the loan process, you won’t have any issues.
Contact us if you are looking to purchase a home anywhere in East Tennessee. You can also call Patrick or me anytime! Nic: (423) 748-0999 Patrick: (423) 312-4543