Avoid These Common Mortgage Mistakes and Ensure a Smooth Home Purchase!

Dated: January 10 2024

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Congratulations on taking the exciting step of applying for a mortgage and moving closer to your dream home! To make this journey smoother and more successful, here's a friendly reminder of crucial things to keep in mind after applying for your mortgage and before closing. Plus, we've included a call to action to guide you through this crucial phase.

Don't Deposit Large Sums of Cash

Lenders need to trace your money, so avoid depositing large sums of cash into your accounts without discussing the proper documentation process with your loan officer.

Avoid Making Any Large Purchases

It's not just home-related expenses that matter; any significant purchases can raise red flags for lenders. New debts can impact your debt-to-income ratios, potentially affecting your mortgage approval. Resist the urge to splurge on furniture or appliances for now.

Say No to Cosigning

Loans Cosigning for a loan makes you accountable for its success and repayment, which can increase your debt-to-income ratio. Even if you won't make the payments, your lender will still consider them against you.

Don't Switch Bank Accounts

Consistency is key when it comes to sourcing and tracking your assets for lenders. Consult your loan officer before transferring any money between accounts.

Avoid Applying for New Credit

Whether it's a credit card or a car loan, multiple credit inquiries across various financial channels can impact your FICO® score. Lower credit scores may affect your interest rate and eligibility for mortgage approval.

Keep Your Accounts Open

Contrary to popular belief, having less available credit doesn't make you less risky. Your credit history's length and depth, along with your credit utilization, play a significant role in your credit score. Closing accounts can negatively impact these aspects of your score.

Discuss Changes with Your Lender

Be transparent with your lender about any financial changes or expected changes in your life. Review and execute income, asset, or credit blips in a way that ensures your home loan approval. If your job situation has changed recently, share that with your lender.

In summary: Before making any significant financial decisions, such as large purchases or moving money around, consult with your lender. They are qualified to guide you on how these decisions may impact your home loan. Your goal is a smooth and successful home purchase, and your lender is there to help you achieve it! Remember, a little caution now can lead to a big celebration when you finally move into your new home. Best of luck on this exciting journey! 🏡💫

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Nannette Turner

When I initially ventured into the real estate arena in Lynchburg, Virginia in 2003, I found myself at the forefront of change, being among the first agents in Lynchburg to successfully utilize online....

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