Keeping it Steady: What to Avoid Before Securing Your Mortgage
When it comes to securing a mortgage, surprisingly, the key is not just about having enough money, but having consistent money.
Here at St. Cloud Mortgage, we want to ensure that your application is as strong as can be. Let’s discuss a few key things you should avoid doing before your loan is completely finalized.
1. Hold Off on Big Purchases
Buying new furniture, upgrading your appliances, or splurging on that shiny new car might seem like a proactive move into your new home, but lenders see it differently. Major purchases can significantly impact your credit profile and your debt-to-income ratio, making you a riskier prospect.
2. Keep Your Job
Consistency in your employment is a huge factor. Changing jobs or, worse, quitting your job can be seen as instability in your income by a lender. If you’re considering a switch, it might be wise to wait until after your mortgage is approved.
3. Talk to a Professional Before Large Transactions
Before you move large amounts of money into or out of your account, talk to your mortgage professional. These large deposits or withdrawals can be seen as red flags that might prompt further checks and questions.
4. Don’t Rush to Pay Off Debts
It might seem counterintuitive, but paying off old debts or collections may not always be the best move pre-mortgage. This can change your financial landscape and could affect how lenders view your financial stability. Always consult with a mortgage professional first.
5. Avoid Cash for Good Faith Deposits
While cash might be king in other scenarios, when it comes to good faith deposits, it’s a peasant. Cash is hard to trace and verify which could lead to delays in closing. Opt for traceable transactions instead.
6. Limit Credit Inquiries
Each time your credit report is pulled, it can potentially lower your credit score. Try to minimize the number of times your credit is checked during the mortgage application process.
Navigating the path to a new home is exciting, but it's also lined with opportunities to inadvertently step off course. Keeping your financial profile consistent is crucial during the mortgage application process. Have questions or need advice on how to manage your finances during this time? Reach out to us at St. Cloud Mortgage. We’re here to guide you every step of the way on your journey to homeownership.
Feel free to contact Shelvin or visit our website for more personalized advice and further details! Stay Steady, Stay Approved.
