What You Do During the Mortgage Loan Process Can Hurt You
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 loan
it will be the what to do and the not to do’s during this time through the closing stage of a home. 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, Ginny Gorman, at 401.529.7849.
Consider the following to do’s and not to do’s during 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. Any additional credit will negatively impact your current credit score and your ability to get a loan.
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 dollar 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 when you consolidate debt. Wait until after the home 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, don’t go buying a diamond engagement ring 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 mortgage lender a call right away.
Buying a home takes some credit initiative and know how on your part. Make sure you get your free copy of your annual credit report every few months from the credit bureaus. 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 are important to know.
Ginny Lacey Gorman is your go to top selling North Kingstown Real Estate Agent for real estate in Rhode Island and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well.
Waterfront, oceanfront, luxury and coastal RI real estate are her specialty but all of RI is her backyard. When you are in need of a good professional for your buying and selling needs and an internet savvy real estate agent who sells RI houses in this real estate market successfully– call Ginny at 401.529.7849 or email me at ginny@RiHouseHunt.com.