What Should You Avoid After Applying for a Home Loan?
When you apply for a home loan, you don’t want to jeopardize your chances of closing on the home of your dreams. Making any of the following mistakes can reduce the amount of financing you qualify for as well as potentially cause the home lender to reject your application.
Don’t take on additional debt. Your debt-to-income ratio is one aspect that lenders take into consideration, so increasing your overall debt while not increasing your income can cause a red flag. It’s best to keep that number below 43% since anything higher might consider you a risky borrower.
Don’t fall behind on bills. Credit scores are important to lenders, and failing to keep up with your bills could potentially hurt your score. Even paying just one bill past its due date can remove a few points from your credit score, so make sure you’re paying everything on time.
Don’t close a credit card account. You might mistakenly believe that closing a credit card account can help your credit, but doing so reduces your overall credit, and your debt-to-credit ratio increases.
Don’t change jobs. A lender wants to make sure you have a steady source of income, and switching jobs when you’re in the process of securing a loan could hurt your chances. Also, if you start the new job right before you apply, you might not even have a pay stub to show how much money you bring home.
When it comes to purchasing a home via a home loan, you need to avoid participating in these types of changes that could prevent you from qualifying for that loan. If you need further financial guidance, consider reaching out to a financial advisor who can help answer any specific questions you might have.
Sources: Smartasset.com, Nerdwallet.com, Keepingcurrentmatters.com
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
