Mortgage Approval is NOT Set in Stone
You've found the Indianapolis home you want to buy and have been approved for a mortgage. Congratulations! You are on your way to being a homeowner. Now that you have approval, make sure you don't do anything to sabotage it.
Since there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals can be revoked at any time prior to funding. There may be last minute verification of employment or an updated credit report run before final approval. As mortgage applicants, there are many events that are out of your control -- job security and health matters, for example. But there are also events that are within your control.
Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process. It may be the difference between being approved by the bank, and being turned down.
- Don't buy a new car or trade-up to a bigger lease.
- Don't quit your job to change industries
- Don't switch from a salaried job to a heavily-commissioned job
- Don't transfer large sums of money between bank accounts
- Don't forget to pay your bills -- even the ones in dispute
- Don't open new credit cards -- even if you're getting 20% off
- Don't accept a cash gift without filing the proper 'gift' paperwork
- Don't make random, undocumented deposits into your bank account
Now, avoiding these items may not be practical for everyone. For example, if your car lease is expiring and you need a larger vehicle, it doesn't mean you can't buy the car -- just check with your loan officer first to be sure the new payments won't 'break' your approval.
The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of down payment.
Mortgage lending is full of 'gotchas' - so my advice to my clients is not to buy anything you don't need while waiting to close on your new home.