You Got a Loan Pre-Approval, Now What?
When it comes to shopping for a home, it’s pretty common knowledge that prospective buyers should get pre-approved for a mortgage to see what kind of budget they are in for their new home. However, you don’t necessarily go from pre-approval to immediately purchasing, and your preapproval letter is typically valid for 90 days assuming no major financial changes happen in that window of time. So what do you do in the meantime? Here at the Cherry Creek local movers, we want to help guide you through the process of what comes next.
Do not open any new credit lines. Mortgage lenders do a second check before a final loan is approved, and new credit lines could mean less available funding from a home loan. Your credit score can change from new credit and your interest rate could suffer as well. It’s best to just skip any new credit offers, no matter how good the deal seems.
Skip out on major purchases. When it comes to big purchases like cars, appliances, and high end electronics, its best to wait until you are in your new home and your loan is processed and approved. Jumping the gun on buying big ticket items will only come back to bite you in the end. Patience is a virtue…so wait!
Don’t pay off all of your debt. While it may seem sensible to pay off other debts and only focus on the mortgage, having various levels of existing debt that you pay towards on time shows that you can manage multiple streams of debt owed. This is a good thing.
Don’t co-sign anyone else’s loan. Again, this jeopardizes your credit and it literally puts it in the hands of someone else. While you want to think your friend or family member will pay their bills on time, you are putting your credit at risk when you vouch for them via co-sign.
Stay at your job. Job stability plays a factor in your credit worthiness, and switching jobs (no matter what the reason) can signal a red flag to lenders who are not sure you are going to be able to make timely loan payments with a fickle job situation.
Pay attention to lender requests. If your lender recommends steps or tips that would benefit your lending situation, listen and heed their advice. Provide all documents as soon as requested, and try to be prompt in returning calls and other forms of communication.
These are a few tips that can help you keep the lending rate you are approved for, and may even help you get a little extra when it comes time to go in for the real deal mortgage loan. Best of luck on your new home shopping!