7 Things You Don’t Want to Do After Applying for Your Mortgage

(Courtesy of Home Capital Network)

A loan application is like a snapshot of your financial life and – just like a photo – results are best when nothing is moving! Let our proven track record of success and effective mortgage strategies go to work for you.

1. Don’t Apply for New Credit
You could lose up to 50 points from your credit score for one hard inquiry! Even if you get a “pre-approved” credit card solicitation in the mail, when your credit is pulled by a potential creditor or lender, your credit score immediately drops.

2. Don’t Create Red Flags
The less activity on your reports during the loan process, the better. Even something seemingly as harmless as paying down a large credit card balance, changing your normal pattern of credit card usage, adding new accounts, co-signing a loan or even making a name or address change on your accounts – can raise red flags.

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3. Don’t Pay Off Collections or Charge-Offs Without Consulting Us First
Sometimes, it’s best to pay off your accounts through escrow. Due to the last recorded date of activity, if you pay your collections during the loan process, your credit score may decrease.

4. Don’t Miss a Single Payment
Keep current on your mortgage, auto loans and credit card payments. A single 30-day late payment can drop your credit score by 75 points or more.

5. Do Not Switch Bank Account Funds
Do not switch money (funds) from one bank account to another. Avoid making cash deposits unless you can prove where those funds came from. New guideline changes require verification of every deposit whether it’s a paycheck, check from parents or the sale of any item. Be sure to make a copy of the check and deposit receipt.

6. Don’t Transfer Retirement Account Funds
When it comes to retirement accounts, do not transfer any funds into any of your accounts until you find your home. Find out in advance how long it will take to process your withdrawal. It might be to your advantage to have these funds paid directly to your escrow/title company.

7. Don’t Consolidate Credit Card Balances to One or Two Cards
During the loan process, don’t consolidate all of your credit card debt to one or two cards – even if it seems like the sensible thing to do. It will appear as though you are maxed out on that card (or cards).

Remember, your credit will be re-puller prior to closing. Our best advice is to avoid any major purchases or changes in your financial activity that will impact your credit report – until after your new loan is closed. Be ready to provide a clear paper trail of your documentation. Never cross out or alter anything on a document. To avoid delays, include every page of the document.

Home Capital Network

Home Capital Network will go the extra mile to help you get approved. To schedule a complimentary loan consultation, contact:

Frank Approvato
Home Capital Network
(908) 692-0917