JVM Lending has seen many homebuyers knock themselves out of qualifying range after getting pre-approved for a mortgage. These actions should be avoided by homebuyers after getting pre-approved for a mortgage to ensure they remain qualified for their loan.
Start A New Job In A “Different Field”
A job change in the same field is okay and does not derail a homebuyer’s qualification as the as their compensation is the same or higher. If homebuyers start a new job in a completely different field, they will need to season their new income source for at least six months.
If homebuyers are paid hourly in their current position, they should also avoid taking days off. If debt ratios are especially tight, even one day of missed work can impact qualification and the amount of reserved funds available.
Large Deposits That Cannot Be Explained
Any deposit that is over $500 needs to be explained and/or “paper-trailed.” Deposits from mattress money, foreign and untraceable bank accounts, or cash payments of any kind can render a bank account invalid and its funds unusable for qualifying purposes. If homebuyers need to make large deposits that are difficult to “paper-trail,” contact a JVM Lending Mortgage Analyst for advice.
Avoid Taking On New Debt After Getting Pre-Approved For A Mortgage
Homebuyers should not take on new debt after getting pre-approved for a mortgage. This can range from increasing credit card balances, purchasing a new car, or taking out loans for college. This is especially important if a homebuyer’s debt-to-income ratios are tight. New debt can severely impact a homebuyer’s credit score and the amount of financing they qualify for after getting pre-approved for a mortgage.
Homebuyers also should not co-sign for anyone else’s debts. Even if they are just a “co-signer,” the new loan will still show up on their credit report. Co-signers will still be held responsible for the new debt and the payments until their lender can show twelve canceled checks from the person making payments.
This goes without saying, but homebuyers should make sure they do not miss any payments on their current debts (credit cards, car loans, etc.). Any missing payments will show up when lenders pull credit reports and can sharply reduce their overall credit score and qualifying ability.
Have Mortgage Questions?
This blog covers just a few of the actions homebuyers should avoid after getting pre-approved for a mortgage. Working with a reputable mortgage lender with excellent buyer-education is key to avoiding mistakes and ensuring your loan closes on time. JVM Lending is a family-owned mortgage company with offices in California, Texas, and Arizona, and has some of the best buyer education resources available. Contact our Mortgage Analysts, available 7-days a week by phone at (855) 855-4491 or by email at [email protected].