Don’t transfer a large deposit of money into your bank account. Your lender needs verification on it, and this process can be lengthy if you can’t produce documentation like a pay stub, invoice, or a letter from a gift-giver. Always talk to your Loan Officer upfront for guidance if you are in this situation.
Don’t keep cash at home that you intend to use in the transaction. Skip the hassle of trying to produce documentation for it and keep it safe in your bank account.
Don’t open or close credit card account while you are applying for your home loan. The credit card companies report this to the credit bureaus. Doing so may change your credit score or ratios which can affect your loan qualification. Even if the lender pulled your credit already, know that the lender does a soft pull at the end before closing, it’s called a credit refresh, and any changes you did will show up.
Don’t change jobs after you apply. If you have to change jobs, it’s recommended to wait 30 days after starting your new job to apply for your home loan so that you can establish your income with your lender. You will have to show at least one pay stub to start the loan process.
Don’t complete any major purchases while applying for your loan– especially on credit cards. Wait to buy big-ticket items like furniture or a new car until after closing. Talk to your Loan Officer if you have such plans.
Don’t overdraw your checking account. This may seem obvious, but keep a watchful eye over your account balance to avoid this costly mistake. If your lender requests a bank statement from you, it certainly won’t look good if you have overdraft charges because they may think you have insufficient income or that you’re unable to manage your money.
And last but not least, do not withhold information on the mortgage application. Be open with your Loan Officer. Whether that “forgetting” to disclose a previous bankruptcy, foreclosure, late mortgage payment, etc. If a financial institution were to find out after submitting the application that you have (purposely) omitted to come forward with certain information, or plainly lied about certain points, that there’s now a big shadow of untruthfulness over everything else you have supposedly fully-disclosed. More often than not, your mortgage application will be declined, and may jeopardize future applications as well.