Things To Avoid After Applying for a Home Loan
Once you’ve applied for a mortgage to buy a home, there are some key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when it comes to making any big purchases. Here are a few things you may not realize you need to avoid after applying for your home loan.

Don’t Deposit Large Sums of Cash
Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
Don’t Make Any Large Purchases
It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgage. Resist the temptation to make any large purchases, even for furniture or appliances.

Don’t Co-Sign Loans for Anyone
When you co-sign for a loan, you’re making yourself accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.
Don’t Switch Bank Accounts
Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.
Don’t Apply for New Credit
It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval.
Don’t Close Any Accounts
Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those aspects of your score.


In Short, Consult an Expert
To sum it up, be upfront about any changes when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.
Kalamazoo Home Loan Tips
Tip #1 – Check your credit score
Having an excellent credit score permits you to receive the best deal when looking for a mortgage for your real estate property. We recommend that you order a copy of your credit report so you will be able to see what your credit rating is prior to buying a home. You can then find ways to enhance your credit score if necessary.
Tip #2 – Get your financial documents in order
When you choose to get a mortgage, you will be expected to send a variety of financial documents to your lender. By having these documents prepared beforehand, it will aid the application process.
Tip #4 – Utilize a mortgage calculator
If you’re interested in understanding how your mortgage will work and how you can save money in interest these sheets are perfect for someone looking to fully understand their monthly payments.
Tip #5 – Get pre-qualified
Many real estate agents want prospective clients to be pre-qualified for a mortgage to help them assess their ability to obtain a loan. The mortgage payment prequalification process is fairly simple. Especially important financial information, such as your salary and the condition of your investment funds and savings, is reproduced to calculate the loan qualification. Once you’re pre-qualified, you will have a more clear understanding of how much you are qualified to borrow.

Where to Go From Here
You want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.