Whether you want to refinance your current home mortgage or you are preparing for purchasing a home, there are some things you should never do during the home loan application process.
Here are the most common things to avoid to ensure your financing goes smoothly.
- Don’t apply for credit.
- (New credit card, car loan, or financing for furniture or appliances)
- Don’t make major purchases.
- Don’t liquidate funds.
- (Keep your investment funds invested)
- Don’t make large deposits.
- Don’t switch jobs as stability is important to your creditworthiness.
Are you asking yourself “why?” It is because all of these factors could impact your loan approval. Keeping your credit score and your finances stable as you go through the loan application process is critical to securing your financing quickly and smoothly. Mortgage Loan Officer Amy Anton wants to remind potential buyers that “Any choices you make that will affect your financial situation can affect your qualification for a mortgage.”
If you’re unsure whether an action you wish to take may affect your qualification, contact your Dakota Community Bank & Trust home loan officer first.
Five things you should do to increase your likelihood for approval when purchasing a home include:
- Making sure you have ready access to several months (and in some cases, years) of:
- Pay stubs
- Bank statements
- W-2s and/or 1099s and/or K-1s
- Tax returns
- Keeping up on all your credit payments:
- Credit cards
- Student loans
- Staying at your current job, since reliable income is a big part of your qualification.
- If you receive a large deposit, making sure you can track its source and purpose.
- Talking to your home loan officer before you make a large purchase of any kind (car, furniture, etc.). Doing so could impact your loan approval.
Since getting a mortgage requires that you show your creditworthiness and financial stability, the few steps above can help position yourself as a good candidate for a mortgage. These tips are a great start to getting you on the road to refinancing your current mortgage or purchasing a new home!
If you are interested in starting the home loan application process, our online pre-qualification or full application can be found here.