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8 Home Loan Approval Tips

8 Things You Should NOT Do When A Home Loan May Be In Your Future

The lending world has tightened as a result of the economic financial meltdown. In fact, new guidelines now require lenders to pull your credit at the time of application, then pull it again within a few days of closing on your loan. Therefore, if you’re thinking of applying for a mortgage loan in the near future to buy a home, below are several things to steer clear of leading up to and DURING the mortgage loan process.

Don’t apply for any credit cards! This will affect your credit score and could change your loan to value ratios and prevent you from qualifying for a home loan.

Don’t buy or lease an auto or obtain any kind of loans! Lenders look carefully at your debt-to-income ratio. A new loan or lease can greatly impact those ratios and prevent you from qualifying for a home loan.

Don’t move assets from one bank account to another! These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

Don’t change jobs! A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

Don’t buy new furniture or major appliances for your new home! If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet closing costs.

Don’t run a credit report on yourself unless you do it DIRECT with the credit reporting agency! If you run through any other company (even Free Credit, this will show as an inquiry on your lenders credit report. Inquiries can reduce your credit score and must be explained in writing.

Don’t attempt to consolidate bills before consulting us, your lender! We can advise you if this will have a positive, or negative affect on your mortgage financing.

If moving, don’t pack or ship information needed for the loan application! Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing