Take steps to make sure your mortgage processes smoothly

Knowing what actions to avoid after you submit your application can keep you on the right track. 

Keep your finances in good standing between submitting an application and closing

Certain actions can delay or prevent your home loan from closing, so it's important to avoid these common mistakes. 

• Don’t make any large purchases like a new car or furniture. When you take on new debt, this will lower your FICO score and increase your debt to income ratio. This can sometimes make borrowers who qualified for a loan initially, no longer eligible.
• Don’t deposit large deposits into your bank accounts. During underwriting, copies of your bank statements will be submitted. You'll need to explain large cash deposits. Small deposits are fine, but getting $10,000 from a family member as a gift in cash, for instance, is not.
• Don’t co-sign other loans for anyone. When you co-sign for a loan, you are financially obligated to repay that debt. Even if you will not be making the payments, we are required to consider the payment in your monthly budget. This will affect your debt-to-income ratio and may disqualify you for a mortgage.
• Don’t change bank accounts. Your bank statements will be submitted to underwriting as proof of your assets. The review process is considerably easier if there is consistency in your account records. Even if you plan to transfer money between accounts, talk to us first to make sure it won’t affect your home loan application.
• Don’t apply for new credit. Every time you have your credit report run (whether it’s for a mortgage, auto loan, credit card, furniture purchase, etc), your FICO score will decrease. A lower credit score may affect your eligibility for approval and can impact your interest rate for this and future loans.
• Don’t close any credit accounts. Many borrowers believe that having less available credit makes them less risky and more likely to be approved, but this isn't true. A major component of your score is the length and depth of your credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those factors of your credit score.