Congratulations on getting a pre-approval for your home loan! You did your research on the 5 types of loans and you even prepared for the 3 questions from your mortgage lender. You are not out the woods yet, however, when it comes to getting to the meadow of home ownership. Until you get a settlement date on your home purchase, you need to protect your financial profile. Here are four mistakes that can impact your settlement even after you have been pre-approved.
DON’T APPLY FOR NEW CREDIT
Your lender may take a second look at your credit score after you have already been pre-approved. Anything that impacts your credit score, like applying for new credit, can impact your score. Your credit score can also impact your interest rate.
DO NOT MAKE MAJOR PURCHASES
This will impact your debt-to-income ratio, which your lender needs to factor. Even if you pay with cash you have fewer assets to use as a down payment.
DO NOT PAY OFF DEBT
Moving large amounts of money will have an impact. Paying off your credit card may seem like a good thing, but doing so effectively changes your financial profile from when you were pre-approved. This also creates new questions for your lender, like where the money came from to pay off the debt.
DO NOT CO-SIGN LOANS
Co-signing for any new loan, even a student loan or car loan, will be considered debt. Again, one of the factors that lenders care about is your debt-to-income ratio. If you increase your debt, this impacts your ratio.
Any major financial changes in your profile can impact your final loan agreement. Even falling behind on your bills can impact your financial profile and overall credit. The best thing to do—especially since you put in a lot of work to get a pre-approved loan—is to maintain your financial status.
Stonebridge Mortgage Group can help you decide which best fits your goals. We can also help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. We serve the greater Portland area and are in Gresham, Oregon.