After you have applied for a mortgage to buy a home, there are a few important things to remember. Even though it's fun to think about moving in and decorating, don't make any big purchases just yet. Here are a few things you probably didn't know you shouldn't do after getting a home loan.
Don't put in a lot of cash.
Lenders need to know where your money came from, and cash is hard to track down. Before you put any cash into your account, talk to your loan officer about the right way to keep track of your transactions.
Don't buy anything too big.
You could lose your loan if you buy something that isn't related to your home. Lenders may be worried about any big purchases. When a person has new debt, their debt-to-income ratio goes up (how much debt you have compared to your monthly income). Since loans with higher ratios are riskier, the borrower may no longer be able to get a mortgage. Don't give in to the urge to buy anything big, even furniture or appliances.
Don't sign loans for other people.
When you co-sign for a loan, you agree to be responsible for making sure the loan is paid back. With this obligation, the ratio of debt to income will also go up. Even if you say you won't make the payments, your lender will still count them against you.
Don't move your money around.
Lenders must be able to find and keep track of your assets. This job is much easier to do when all of your accounts are the same. Talk to your loan officer before you send any money.
Don't try to get more credit.
It doesn't matter if you're getting a new car or a new credit card. Your FICO® score will be affected when your credit report is checked by multiple companies (mortgage, credit card, auto loan, etc.). Your mortgage interest rate and maybe even your ability to get a mortgage can be affected by how low your credit score is.
Don't get rid of any accounts.
Many buyers think that having less credit makes them less of a risk and makes it more likely that they will be approved. This is wrong. A big part of your credit score is how long and how well you've used credit (not just how well you've paid bills) and how much of your available credit you've used. Both of these parts of your score will go down if you close accounts.
In short, talk to a professional.
In short, be honest with your lender about any changes when you talk to them. Changes in your income, assets, or credit score should be looked at and handled in a way that makes sure you can still get a home loan. Tell your lender if your job or employment status has changed since you last talked to them. In the end, it's best to tell your loan officer everything you plan to do before you do anything related to money.
Bottom Line
You want everything to go as smoothly as possible when you buy a house. Remember that you should talk to your lender before you make any big purchases, move your money around, or make any big changes in your life. Your lender is the best person to explain how your financial decisions may affect your home loan.
