Things You’ll Want To Avoid After Applying for a Mortgage

Congratulations on starting your journey toward homeownership! Applying for a mortgage is a significant step, and now that you’ve begun the process, it’s important to protect your approval by avoiding common pitfalls. Even small financial changes can impact your loan, so here are four key things to steer clear of as you move closer to closing day.

1. Don’t Change Bank Accounts

Consistency is crucial during the mortgage approval process. Changing bank accounts can raise red flags for your lender and delay your application. Your loan officer will need to track your financial history, and moving funds between accounts or opening new ones can make this process more complicated. If you absolutely must make changes, consult your loan officer first.

2. Don’t Apply for New Credit or Close Existing Accounts

It might be tempting to apply for a store credit card for that big discount or close an old account you don’t use anymore, but both actions can impact your credit score. Lenders check your credit during the approval process and again just before closing. Any fluctuations could jeopardize your loan approval. Stay the course and avoid making any changes to your credit profile.

3. Don’t Make Large Purchases or Transfers

Dreaming about buying furniture or appliances for your new home? Hold off until after closing. Large purchases or significant transfers can affect your debt-to-income ratio, which is a critical factor lenders consider. Even if you plan to pay in cash, those withdrawals could cause confusion during underwriting.

4. Don’t Co-Sign Loans for Others

Helping a friend or family member by co-signing a loan may seem harmless, but it’s a risky move during the mortgage process. Co-signing increases your financial obligations, which can alter your debt-to-income ratio and raise concerns for your lender. As a rule of thumb, avoid taking on any new financial commitments until your mortgage is finalized.

Pro Tip: Always Check with Your Loan Officer

When in doubt, ask your loan officer before making any financial moves. They’re your best resource for ensuring your loan stays on track and your closing goes smoothly. A quick call can save you from potential setbacks and keep you moving forward toward your new home.

Let’s Connect!

If you’re looking to buy a home in Minnesota, I’m here to help! As a real estate expert, I can guide you through the process and connect you with a trusted loan officer who will ensure your mortgage journey is seamless. Reach out today, and let’s make your homeownership dreams a reality.