The Essential Mortgage Do's & Don'ts: Your Guide to a Smooth Home Purchase

What are the things that one should avoid when they are in escrow?

There are some essential considerations before closing on a home. Following your loan application, there are a few things you should avoid doing so you don’t jeopardize your qualification and end up losing your dream home.  

Avoid making large cash deposits.

Cash is hard to track down; lenders must know where you got your money. Could you talk with your loan officer about correctly recording your transactions before depositing money into your accounts? Avoid Making Any Major Purchases

You could lose your loan if you make purchases not strictly related to your home. Lenders may raise concerns about any sizable investments. Debt-to-income ratios are higher for those with new debt (how much debt you have compared to your monthly income). Because riskier loans have higher percentages, consumers might no longer be eligible for mortgages. Avoid the urge to make any significant purchases, including those for appliances or furnishings.

Don't Co-sign for Anyone's Loans

When you cosign for a loan, you assume responsibility for its success and repayment. This obligation results in higher debt-to-income ratios. Your lender will have to count the payments against you even if you pledge that you won't be the one making them.

Avoid switching bank accounts.

When your accounts are consistent, it is simpler for lenders to track your assets. Before transferring money, could you talk with your loan officer?

Avoid requesting new credit.

Several credit inquiries can lower your FICO score, lowering your interest rate and loan eligibility, whether it's for a new credit card or a car loan. Wait to apply for further credit until after your mortgage is closed.

Keep your current accounts open.

Contrary to widespread assumption, having less credit accessible does not reduce your risk as a borrower. your favor

Remember to let your lender know if your income changes, as this could affect the final approval of your mortgage.

Neglecting caution could mean missing out on your dream home. That's why having an experienced agent by your side is crucial.