The real estate market in Boulder County is bouncing back with strong demand and low inventory, which makes maintaining your mortgage approval imperative if you’re shopping for a home.
Qualifying for a mortgage can take a quite a bit of effort. Once your mortgage is approved, it is important not to make any major financial changes until you sign your final disclosure and the loan is closed.
To keep your mortgage approval, you need to know the financial moves NOT to make.
Your mortgage approval is primarily based on documenting your income and assets, your equity stake or down payment, your credit history, and the cash you’ll have left over after the deal is done.
After your mortgage is approved, don’t change any one of those qualifiers without first consulting your loan officer or you could lose your mortgage.
Here’s what to keep in mind:
Avoid big purchases
Don’t buy a new car, expensive jewelry, furniture, or any large possessions, or change the lease on your current car. It could show up on your credit report or bank statement. The new loan or purchase amount could tilt the debt-to-income ratio the lender used to approve your home loan, and your mortgage could vaporize.
Don’t get new credit
Don’t sign up for any new credit cards or other lines of credit, even for a zero-interest rate. Resist all of those enticing credit card offers that flow in after you get your mortgage approval.
Don’t miss a bill payment or pay late
Pay your bills on time without fail, even if you dispute the charge. If you stop paying a bill, it can end up on your credit report and cause a problem with your mortgage.
Don’t switch jobs
Now isn’t the time to start a new job or lose the job you have. It is okay to take a second job, as long as you keep the job you have. However, if you should be so fortunate as to get a promotion and raise, your mortgage shouldn’t be jeopardized.
Don’t spend your cash
Don’t use your cash reserves, transfer large sums between bank accounts, or make undocumented transactions in your back account – either deposits or withdrawals. This activity can cause your mortgage approval to be reversed.
Just remember to control items that affect your financial picture, and barring any uncontrollable life events, your mortgage should be fine.
For more information see: nerdwallet.com/blog/mortgages/credit-mortgage-approval or
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in residential and commercial real estate. For questions, e-mail Tom at [email protected], call 303.441.5620 or visit boulderco.com.