Here’s a quick rundown of the top 12 things you should not do during the loan process:
1. Quit your job (or change jobs). Why is this important? The day before closing, we have to call your employer to make sure you’re still there. If you quit, retire, or change jobs, that will be known the day before closing.
2. Buy a new car. All mortgage companies have to do a soft credit pull the day of or the day before closing to make sure you haven’t taken on any new debt. If you purchase a new car, that will be revealed during a soft credit pull.
3. Max out your credit card(s). If you max out any credit cards, the minimum payment on your credit report goes up.
4. Let any collections show up on your credit report. Even something as small as a co-pay at the doctor’s office can upset your approval because that collection can cost you 30 to 40 points.
5. Spend the money you set aside for your closing costs. Believe it or not, this does happen.
6. Omit any liabilities (childcare costs, private land payments, etc.). Eventually, these will come out, and it’s much better if we know about them up front.
7. Buy any major appliances or furniture a day or two before closing. I know it’s tempting to do so, but if you take on any debt during the loan process, we’ll have to count that payment. Even if the payment is interest-only, we still have to count it on the credit report.
8. Apply for more credit. Every new credit pull will cost you a few points.
9. Make any large cash deposits (unless you have a bill of sale or absolute proof where it came from). Cash is a bit of a no-no in the mortgage business.
10. Transfer any funds from one bank account to another. This makes our job more complicated. It means we have to get statements proving where that money came from and what it was for.
11. Don’t switch banks. Things are much simpler if you just stick with one bank.
12. Don’t co-sign for anything. A lot of people think this is okay as long as someone else makes the payments, but it’s not. We still have to count that against you—particularly if you co-signed less than 12 months ago.
As always, if you have any questions about this or any other mortgage topic, just give me a call or shoot me an email. I’d love to hear from you.