The To Do’s and Not to Do’s during the Loan Process.
If there is one thing I can say to you when you are applying for a mortgage it will be on this page of the what to do
To Do's and Not to Do's
and the not to do’s when you are applying for a mortgage through the closing stage. Please heed these points. 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 real estate market. If you have any questions on any of the following points, do not hesitate to call me at 401.529.7849.
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.
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 a call at 401.529.7849. I have a names of good lender I work with that can answer all your mortgage questions. The To Do’s and Not to Do’s during the Loan Process.
