In light of the current market and tightening of credit underwriting standards by both lenders and mortgage default insurers as of late, keep in mind that now more than ever its important to be careful what you do between the time your mortgage is approved and when it funds. A few mortgage lenders and insurers have been doing something lately that they have not done in a long time, and that is pull new credit bureaus prior to funding, especially if there is a long period between the time of your approval and when the mortgage actually funds.
Following are eight tips to keep in mind between your mortgage approval and funding dates:
1. Dont buy a new car or trade-up to a more expensive lease.
2. Dont quit your job or change jobs. Even if its a better-paying job, you still are likely to be on a probationary period. If in doubt, give me a call and I can let you know if this may jeopardize your approval.
3. Dont change industries, decide to become self-employed or accept a contract position even if it is within the same industry. Delay the start of your new job, self-employment or contract status until after the funding date of your mortgage.
4. Dont transfer large sums of money around between bank accounts. Lenders get especially skittish about this one because it looks like youre borrowing money. Be ready to document cash transactions or money movements.
5. Dont forget to pay your bills, even ones that you are disputing. This can be a real deal-breaker. If the lender pulls your credit bureau prior to closing and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they will fund. You dont want to have to scramble to pay off a debt at the last minute!
6. Dont open new credit cards. Again, just wait until after your funding date.
7. Dont accept a cash gift without properly documenting with me even if this is from proceeds of a wedding. If you have a bunch of cash to deposit before your funding date, give me a call before you deposit it.
8. Dont buy furniture on the Do not pay for XX years plan until after funding. Even though you dont have to pay now, it will still be reported on your credit bureau, and will become an issue especially if your approval was tight to begin with.
While you may not risk losing your mortgage approval because you have broken one of these rules, its always best to talk to me before doing any of the above just to make sure!