I was reminded today that no matter how many times we say it, we can’t say it enough. There are some things that are at best going to delay your approval and at worst going to get you flat out declined.
Don’t do these things when you are getting your mortgage through me!
1. Don’t do ANYTHING credit related without talking to me. Just don’t.
2. Don’t change your pattern of credit usage. Adding to your balances is a problem. Paying off large balances is a problem. Hold tight until you are closed.
3. Don’t stop making regular payments. For any reason. Your loan application will die.
4. Don’t pay off old collections once you are pre approved. Reactivating these accounts can actually lower your credit score in the short run. Let sleeping dogs lie until after closing.
5. Don’t close credit card accounts. This does two bad things. First your available credit to outstanding borrowings ratio changes (your usage rate). Second, word is that the credit scoring model thinks you are panicking about some pending financial doom when you lower credit available. Both of these lower your score.
6. Don’t consolidate debt. Same general reason as number 5. Just wait until you are closed.
7. Don’t buy anything on “same as cash” terms. They run your credit report, you actually owe the money even if there are no payments and you have to “count” the payments in the debt ratios. Plus underwriters hate to be surprised like this. Wait until your closing is over to buy appliances, furniture etc. on a deal like this. You could complicate your closing if not end up getting denied. Don’t do this. Kapeesh?
8. Don’t think we are not finding out. If Google & Facebook have technology smart enough deliver ads to you on your phone for the store you are standing in for something you might buy, don’t you think your lender has technology smart enough to find out tomorrow what you actually did buy today?
Remember, I don’t make the rules. My job in lending is to help you get approved while not getting tripped up by these rules. Help me help you.
