To Do’s and Not to Do’s during the Mortgage Loan Process.
So you are ready to buy a home. If there is one thing I can say to you when you are applying for a mortgage
it will be the what to do and the not to do’s when you are applying for a mortgage through the closing stage. Please heed these points when buying Rhode Island real estate. I have seen many a buyer think they were going to buy a house and then they do one of the ‘not to do’s’ and thereby not able to buy a home at that time.
Ultimately these buyers wait months to years to try to buy again missing the home buying opportunities and possibly their dream home in this RI real estate market. If you have any questions on any of the following points, do not hesitate to call me at 401.529.7849.
Consider the following is the to do’s and not to do’s in the mortgage home loan process:
1) Do not open any new credit accounts. Of any kind- local store credit or through the mail …just stay put with the current credit accounts that you have open when you apply for your mortgage, i.e. do not take out a car loan during this process. It will negatively impact your current credit score.
2) Do not be ‘good’ and close any opened credit card accounts. Always wait until after you have bought your home to do this action. By closing a credit card account it negatively impacts your FICO score. By closing a credit card account, it will show that your debt to income ration has increased – which is not good for being able to borrow.
3) Do not go over your current available credit card limit. Credit scoring agencies state that you should keep your credit card balances under 30% of the credit card limit during this mortgage loan process. Otherwise, your credit score will drop immediately.
4) Be current on all your payment accounts. Even just one 30-day late will bring your FICO score down.
5) No debt consolidation during this loan process. Sounds like the right thing to do doesn’t it but it is not. The credit system sees this as a negative. Wait until after the house closing and then do it.
6) Red Flags beware. We talked about not applying or adding any new debt accounts at this time, do not co-sign a loan for anyone and don’t go changing your name or address with the credit bureaus either. This should be a ‘quiet’ credit time in your life.
7) Use your credit accounts as you normally would do. Any change in patterns by halting the use of your credit will also send a wrong signal to the credit agencies. Seems odd but the credit agencies look for changes in patterns to see who is beginning to go astray.
8) Stay in touch with your lender. If anything surfaces which you even think may impact your credit score, give your lender a call.
Buying a home takes some credit initiative on your part. Make sure you get your free copy of your annual credit report. You can do this once every twelve months and watch what is on there. Be your own watchful consumer and then nothing will surprise you when you go to apply for a mortgage. If you are looking for a mortgage lender, please give me, Ginny Lacey Gorman, a call at 401.529.7849. I can suggest names of good lenders that can answer all your mortgage questions. The To Do’s and Not to Do’s during the Loan Process.
Ginny Lacey Gorman is your go to North Kingstown Realtor® for real estate in Rhode Island and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well. As a North Kingstown short sale agent, if you are having trouble paying your mortgage contact Ginny to help you through the short sale process successfully. Waterfront, oceanfront, luxury and coastal RI real estate are her specialty but all of RI is her backyard. So feel free to search for RI Homes for Sale. When you are in need of a good professional for your buying and selling needs and an internet savvy Realtor® who sells RI houses in this real estate market - call Ginny at 401.529.7849.