What are Five Things “Not To Do” During the Mortgage Application Process?
What are FIVE things “Not To Do” when trying to get approved for a mortgage?
Recently we discussed what you should do during the mortgage application process, but in today’s video I will share advice of what “Not To-Do” in order to help keep your financing from falling off the tracks.
However, if you have a qualifying question or a loan approval that is experiencing trouble, remember that I started the company way back in 2001, so let our experience be a resource for you and take advantage of our free Second Opinion Service (“SOS”) which can be a great way to help keep your mortgage headed in the right direction.
As the saying goes, an ounce of prevention is worth a pound of cure and may of the issues that we see are unfortunately self-inflicted so let’s take a moment and go over some of the more common mistakes we see so you can be prepared to avoid them before they become an unintended consequence.
- Do not apply for credit
It can be common to receive invitations for credit cards, furniture stores, electronics, appliances, and the list goes on and on, but simply put, do NOT respond to these offers, as any additional inquires can be a factor towards lowering your credit score.
With minimum credit score requirements being so critical, you don’t’ want to put yourself in a position where one point can lead to your loan application being denied. Do not pay off collections or
- Charge-offs and Collections
While this may sound like the complete opposite of what you should do, whenever you make a payment on a negative account, depending on the date it last reported to the credit bureaus, the recent payment actually updates the most recent activity which can turn an old collection into a new problem.
While sometimes paying off negative accounts may be a requirement of loan approval, with our credit expertise, we can provide the proper advice so you know the pros and cons before you make that payment.
- Do not increase credit card balances
Increasing credit card balances is one of the fastest ways to bring your credit score down so make sure to not go on a spending spree in anticipation of your loan closing and keep those credit card balances in check.
- Do not close out credit card accounts
Closing out a credit card can have an immediate negative impact on your score because your are eliminating available credit which can impact the all import ratio between your credit card amount owed and your available credit limit.
- Do not make unexplained deposits into your bank accounts
Underwriting guidelines can very strict when it comes to verifying deposits and the source of where they come from, regardless of the amounts so be prepared to document any deposits including those tough to verify cash deposits.
In summary, while this is not an all inclusive list of what “Not To-Do” during the mortgage approval process, just remember to be proactive and ask questions so you can be in the know about how any decisions can impact your financing.
As always, I want to thank everyone for the continued recommendations and trusting us with all of your mortgage needs.
Whether it be FHA, VA, USDA, or Conventional – Just call or email to discuss your scenario and let us show you the “Metroplex” difference.
800-806-9836 Ext. 280
Just call or email if you have any qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions
I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
Qualifying for a home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the loan process, it is a match that can open the door to home ownership.
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So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.
Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference!
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