As mortgage loans get tougher to secure, as lenders are tightening up their credit underwriting standards, please know that now, more than ever, it’s important to be careful what you do between the time your mortgage is approved and when it funds.
Some lenders have been pulling new credit bureaus prior to funding, especially if there is a long period between the time of your approval and when the mortgage actually funds. This was not done in years past.
Here are eight tips to keep in mind between your mortgage approval and funding dates:
- Please do not buy a new car, or trade-up to a more expensive lease.
- Don’t quit your job or change jobs. Even if it’s a better-paying job, it’s likely theirs a probationary period. If in doubt, call me, and I can let you know if it jeopardizes your approval.
- Do not change industries, decide to become self-employed or accept a contract position even if it’s within the same industry. Delay, delay, delay the start of your new job, self-employment or contract status until post the funding date of your mortgage.
- Don’t transfer any large sums of money between bank accounts. Lenders get especially uptight about this one because it looks like you are borrowing money. Be ready to document cash transactions or money movements.
- Remember to pay your bills, even ones that you’re disputing. This can be a real deal-breaker. Lets say lender pulls your credit bureau before closing, and sees a collection or a delinquent account, the best we can hope for is that they make you pay off the account before they will fund. The last thing we want is to have to scramble to pay off a debt last minute.
- Don’t open any new credit cards. Again, just wait until after your funding date.
- Don’t accept a cash gift without properly documenting it – even if this is from proceeds of a wedding. If you have a bunch of cash to deposit before your funding date, give me a call before and I’ll explain how we can do so without setting off any alarms with the lenders.
- Don’t buy furniture on the “Do not pay for so in so years plan” until after funding. Even though you don’t have to pay now, it will still be reported on your credit bureau, and will become an issue – especially if your approval is tight to begin with.
While you may not risk losing your mortgage approval because you have broken one of these golden rules, it’s always best to talk with me before doing any of the above.
All the best,
- D