Applying For a Mortgage? Here’s What You Should Avoid Once You Do.

BETHANY BEACH HOME BUYERS: Here are some KEY THINGS to avoid once you apply for a mortgage:

Don’t deposit large sums of cash! Lenders need to source your money, and cash isn’t easily traceable. Before you deposit cash into your accounts, discuss the proper way to document your transactions with your lender.

Don’t make any large purchases! We know that new couch would look AMAZING in your living room, BUT, wait until after closing… trust us on this one! Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios, and since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgage. 

Don’t co-sign loans for anyone! When you cosign for a loan, you’re making yourself accountable for that loan’s repayment. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

Don’t switch OR close bank accounts! Tracking your assets is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your lender. Additionally, a major component of your credit score is your length and depth of credit history, and your total usage over available credit ratio. Closing accounts has a negative impact on both of those aspects of your score.

Don’t apply for new credit! Whether it’s a new credit card OR a new car…. Wait until AFTER closing! When your credit report is ran by organizations in multiple financial channels, it will have an impact on your FICO® score. 

Last, Don’t leave your questions unanswered! Always ask your lender or Realtor for advice at any point during your home buying process – we’re here to help!

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