7 Mistakes to Avoid After Mortgage Pre-Approval
I’m always on the hunt for relevant info and I loved this - one of the best articles I’ve seen on this topic for a while. Here are a few paragraphs as a taster...
Congratulations! You've been pre-approved for a mortgage loan on your dream home. You made it past many hurdles, but be careful – you haven't completed the race just yet.
The wrong actions after your pre-approval process can cause the lender to re-think the amount of risk that you present and lead them to back out of the deal. Avoid these seven mistakes that could scuttle your mortgage loan and cost you the home of your dreams.
1. Opening New Credit Accounts – Opening new credit accounts, whether or not you utilize them immediately, should raise a red flag. Your credit score is likely to change, and the lender may review your risk of non-payment assuming that you have decided to take on extra debt. If you plan to open more accounts during this time, be prepared to explain to your lender how you plan to handle these accounts.
2. Making Large Purchases – It may be tempting to make large purchases for your new home, like a new set of furniture, but wait until after you close on the home. The increased debt will raise your debt-to-income (DTI) ratio – and a low DTI is one of the major factors in qualifying for a loan.
Why not just pay in cash? That won't help, either, because it reduces your cash reserves from the evaluation made during the pre-approval process. With fewer cash resources, the lender may question your ability to handle your remaining payments.
Pretty valuable stuff, I’m sure you’ll agree! Why not check out the whole article here and share your thoughts with me afterwards: call (0400) 032-110 or email me at [email protected].
Thanks,
Bill Mitchell