What You Should Avoid Once You're Pre-Approved
Yay, you got your mortgage pre-approval! Now what? Until you close on a home, your finances should sit tight. Remember that your pre-approval is based off of your pay stubs, bank statements, W2s, federal returns, and your credit report so making drastic changes to any of those items is a big risk.
Here are a few things you should and shouldn’t do once you’ve been pre-approved:
1. Keep your job. One factor that contributes to your pre-approval is consistency. It’s ideal to have at least 2 years at your job. By changing jobs, you’re likely to hurt your approval chances. It’s probably not worth it when you’re so close to purchasing the home of your dreams.
2. Don’t make large transactions. Your bank statements will reflect the transactions and cause red flags to go up. Keep transactions reasonable and stay as close to an as needed basis as possible. By all means, definitely avoid putting large transactions on your credit card. So, wait to buy that new car until you’ve closed on your home.
3. Keep your credit cards under 30%. Speaking of credit cards now would be a good time to address the importance of keeping your balances less than 30% of your available credit. Going over that 30% will decrease your credit score, and that’s never a good thing when you’re trying to buy a home.
4. Don’t make large deposits. Unless it’s salary income -such as a work bonus- don’t do it. Everything going in and out of your bank account needs to be able to be easily tracked and sourced. If there’s no paper trail, don’t do it.
It may seem like a lot of should and should not’s right now, but you’ll thank me later. Keep those finances under control and on a strict leash. Having a pre-approval puts you that much closer to having the home you want, don’t do anything to mess it up.
What’s your biggest concern in regards to your finances during or after the pre-approval process?