Your mortgage preapproval is based on your current financial situation as documented in your loan application, and so we don’t want any changes which could impact your approval or your rate lock. Here is a list of do’s and don’ts to guide you.
Many of these items are related to your credit report. In the week before closing, we do a check-up on your credit report to check on recent activity. Any changes would require that your application be updated to reflect the changes – which could impact your rate-lock and even the ability to obtain final loan approval.
Matthew and I have experienced every item listed below and we want to save you unneeded stress! If you have questions about any of these items, please discuss with us.
- Don’t apply for any new credit – no new inquiries on your credit report
- Don’t incur more debt – yes, this is redundant. Don’t buy a car!
- Don’t make late payments on any accounts
- Don’t increase the balance on any credit cards or lines of credit
- Don’t pay off collections or charge-off accounts
- Don’t consolidate or close credit cards
- Don’t dispute any item on your credit report
- Don’t co-sign a loan for anyone
- No large deposits other than payroll
- No large cash purchases
- If you are liquidating funds from an investment account, or drawing from a HELOC, do that early in the process so the documentation can be available for underwriting.
- Don’t quit your job
- Don’t change jobs
- Don’t change from a salaried position to a 1099 contract position
A FEW MORE THINGS
- Respond promptly when we ask you for signatures, documentation, information, etc.
- Choose your homeowner’s insurance early in the process
Frequently Asked Questions
What if I need to buy a car?
Before you make any large purchase, let me know and I will make sure the purchase won’t be problematic for your approval. If you finance the car, let me know the payment and I will make sure the additional liability is not a problem. Then we will need the loan paperwork so we can have the new liability added to your credit report. We will want to do this early in the process so there is plenty of time for the underwriter to review the changes.
If I get a pay raise, can we use the increased income?
We would only be able to use the increase in pay after you’d received a paycheck at the new income level. But if you are already preapproved at your current income level, the additional income wouldn’t be needed.
My parents have decided they want to provide a gift to help me with my home purchase – is this ok?
Please discuss this with me – gift funds are generally allowed, but need to be documented properly, and we can advise you on the most streamlined way to document the gift.
I normally pay off my credit cards each month, but is it ok to just make the minimum payment and accumulate additional funds prior to closing?
This should be ok, but please call me so we can discuss and be sure.