Avoid These Common Mistakes After Applying for a Mortgage

Embarking on the journey to homeownership in Colorado Springs is an exciting chapter in your life, but it's crucial to navigate the post-mortgage application phase with care. As you envision your new home, here's a guide to help you avoid common pitfalls after applying for your mortgage.

1. Mind Your Cash Deposits

• Lenders require traceable funds, and cash can pose challenges in this regard.
• Consult your loan officer before depositing any significant sums and discuss the proper documentation process.

2. Refrain from Large Purchases

• Beyond home-related expenses, any substantial purchases can raise red flags for lenders.
• Large debts affect your debt-to-income ratio, potentially jeopardizing your mortgage approval.
• Resist the urge to make significant purchases, even for furniture or appliances.

3. Caution on Cosigning Loans

• Cosigning for a loan impacts your debt-to-income ratio, even if you're not responsible for payments.
• Lenders consider this additional obligation, potentially affecting your mortgage qualification.

4. Consistency in Bank Accounts

• Maintain consistency in your bank accounts to facilitate sourcing and tracking of assets.
• Discuss any planned transfers with your loan officer before making changes.

5. Avoid New Credit Applications

• Whether for a credit card or a car, new credit applications impact your FICO® score.
• Lower credit scores can affect your interest rate and approval eligibility.

6. Don't Close Existing Accounts

• Closing accounts can negatively impact your credit score, affecting your eligibility and interest rates.
• Understand that less available credit does not necessarily make you less risky in the eyes of lenders.

7. Transparent Communication with Your Lender

• Keep your lender informed about any changes in income, assets, or credit.
• Discuss any financial decisions or life changes with your loan officer before taking action.

Bottom Line

In the vibrant real estate market of Colorado Springs, your journey to homeownership should be smooth and successful. Before making significant financial decisions, consult with your qualified lender to ensure that your choices align with the seamless progress of your home loan. By avoiding these common post-mortgage application mistakes, you set the stage for a positive and stress-free home buying experience.