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Credit Mistaks to Avoid
Once you have ofcially applied for a mortgage, there are a few critical issues to avoid before
you close on your home. While you are, of course, eager to get started decorating, avoid
making any large purchases before your closing. If you have any major life changes or need
to make a substantial purchase, such as a new car, consult your lender rst. If your job or
employment status changes, share that with your lender as well. The best plan of action is to
fully disclose any issues or concerns with your loan ofcer before you do anything nancial in
nature. Below are some things to remember after you apply for a mortgage to help you avoid
any issues with your loan.
Do Not Co-Sign Any Other Loans for Anyone
Even if you are only co-signing, signing on any loan makes you liable for the debt and adds
the debt to your credit report. Regardless, if you are the one making the payments, your
lender will add the debt to your bottom line.
Do Not Deposit Cash into Your Bank Accounts
Lenders must account for your money, and cash can be problematic to document. Discuss
with your loan ofcer how to deposit cash if necessary.
Do Not Make Any Large Purchases
Any debt will add to your monthly obligations, thereby creating higher qualication
requirements. The higher your debt to income ratio, the riskier your loan becomes, which may
cause your loan to be denied.
Do Not Open New Credit Cards or Apply for Any New Credit
Any debt will appear on your credit report and impact your FICO® score. Your credit score
and level of debt determines your interest rate. An increased score could increase your
interest rate and maybe even jeopardize your loan approval.
Do Not Change Bank Accounts
Lenders must track your assets. Speak to your loan ofcer if you need to transfer or open any
new bank accounts.
Do Not Close Any Credit Accounts
Having old credit lines with no balance will not hurt you but, closing those accounts might.
Closing accounts has a negative impact on your credit score. Your length of credit history and
percentage of available credit are essential factors in determining your score.
Mistakes