My Mortgage Approved



You have word from your agent letting you know you are pre-approved for a mortgage. This is an exciting time as you are well on your way to purchasing a new home. A preapproval is usually good for 60 to 120 days depending on the lender. If you do not purchase a home within this time frame, the lender may require you to get preapproved again. Therefore, it is important to continue the great behavior that got you the preapproval, in the first place. Below are eight tips to help keep your financial situation preapproval ready.


1. Don’t for new credit


Some lenders require the mortgage broker to do another credit check before they give final approval. If the credit check reveals new credit inquiries, they may want you to verify that you have not taken on any new debt which will delay the approval. Taking on any new debt can impact your credit score, so it is best not to take the risk.


2. Don’t make any major purchases


If your credit report does get pulled again and it shows you are carrying a balance from making some large purchases, this may affect your approval status. Buying furniture, appliances or renovation material is fine if you have extra cash but putting it on your credit card will increase your debt-servicing ratio which is one of the guidelines used for qualifying a mortgage. This can reduce the loan amount and put your home you made an offer on, out of your price range.


3. Don’t pay off your debt


Paying off debt is usually a good idea, but it can limit your cash flow. Talk with your mortgage agent first to find out if it is best to pay down a loan or keep that cash flow available for a down payment on your mortgage. If you pay off too much debt and no longer have the cash flow to provide a down payment, then it can delay the process of purchasing a home.


4. Don’t co-sign any loans


A lot of people don’t realize that co-signing a loan does affect your credit even if you have nothing to do with that loan from the time you sign. Any loan that shows up on your credit report must be brought into consideration even if you have never had to make a payment. It is a financial obligation and if the primary person on the loan defaults, you must be able to make the payments.


5. Don’t change jobs


Although it may be a great opportunity, try not to switch jobs during the process of obtaining home financing. With every new job, there is a probationary period where you could be let go at any time within that time frame. Even if you believe the job is very secure, unfortunately, lenders do not think so. Of course, there are exceptions but if you can, hold off switching jobs until you purchase a new home.


6. Don’t ignore lender requests


Take mortgage broker’s recommendations seriously. Mortgage agents specialize in mortgages, so they know the ins and outs of the industry. Mortgage agents are not recommending things for the fun of it but instead making you as attractive as possible to not only buyers but lenders. For example, a mortgage agent will suggest you do not buy a car, as this is a large expenditure and a common reason why someone would not get approved. When a mortgage agent requests documents, they don’t do it to make work but are required by lenders to verify information that is provided within the application. Lenders need to fact check and will not provide the credit for your home without these parameters being met.


7. Stay current on your existing accounts


Paying bills on time is crucial to ensure that your credit remains healthy and stable. This includes your overdraft, credit cards and lines of credit.  Pulling your credit gives lenders your current financial snapshot so if they are to pull your credit again, you want to display consistency within your finances.


8. Keep a paper trail of your deposits


Depositing money is a very good idea but keep a paper trail especially when it comes to large deposits that are out of your everyday transactions (paychecks, royalties, etc.). Mortgage fraud and money laundering are still present, so lenders want to do a thorough check to find out where the money is coming from and making sure it is not an illegitimate source.


These tips will help keep your financial picture strong but talk to us today to find out more. We want to make sure you are set up so whether you are ready to buy or looking to create a financial plan to get there. We are Looking out for your best interest®.

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