No. 1:  Applying for new credit

Mortgage lenders are required to do a second credit check before a final loan approval in most cases.

“If it’s just an inquiry, that usually doesn’t cause a problem, but if you’ve opened a new account then it will have to be verified and that could delay your final approval.  It may also reduce your mortgage amount if you are taking on credit after the approval and before funding.

Your credit score could change because of the new credit, which may mean that your interest rate may be adjusted accordingly.

No. 2:  Making major purchases

If you buy furniture or appliances with credit, your lender will need to factor in the payments to your debt-to-income ratio, which could result in a canceled or delayed in your final approval. 

If you pay cash, you’ll have fewer assets to use for a down payment and cash reserves, which could have a similar impact.

Do not purchase any other property until you have funded this mortgage.

No. 3:  Paying off all your debt and Closing Accounts

Every move you make with your money will have an impact, so you should consult with your Mortgage Broker/Professional before you do anything. 

 Closing out accounts can reduce your beacon or credit score.   Reducing your cash reserves may also affect your overall application.   

Please do not skip any visa, line of credit or any credit payment.

No. 4:  Co-signing loans

Borrowers sometimes assume that cosigning a student loan or car loan won’t impact their credit, but it’s considered a debt for both signers and it will reduce your mortgage approval significantly.

No. 5:  Changing jobs

Do not change jobs after a preapproval or approval, even if it seems like a good move.   This may void your approval altogether. 

Consult with your mortgage professional or delay the move after your mortgage has funded.

No. 6:  Ignoring lender requests

If your lender recommends or requests something specific, you should follow directions and provide it right away. 

Providing all documents as soon as they are requested help avoid delays.

No. 7:  Falling behind on your bills

You must pay all bills on time and avoid overdrafts on any account.  Do not skip any payments and pay all bills on time.

No. 8:  Losing track of deposits

Be organized with your down payment and cash reserves.  Do not move money around.  If possible keep in in only 1 account until funding. 

Make sure you can track all your money for the last 3 months.

No. 9:  Forgetting to inform your lender of changes

Any changes to the Purchase Agreement needs to be disclosed to the lender.  Please keep your mortgage professional up to date if your contract changes or anything on your financial situation.

No. 10: Take a Vacation or leave your city

Going away before funding your file is a risky proposition.  Please be available at all times. 

Sometimes lenders need last minute confirmations or documentation and not being available will cause you problems.