What Not to Do During a Mortgage Approval Process

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Getting a mortgage is a daunting financial endeavor. Even after you get preapproved for a mortgage, there’s a long way to go until you have the keys to your new apartment in hand. No matter what property you get a mortgage for, you should definitely be careful during the entire mortgage application process.

For those that don’t know, a preapproval from a lender is based on a few key factors. Those factors are the following: credit, assets, debt, and income. If any of these factors change by a substantial amount before the final approval, your mortgage offer may be in hot water so to speak.

Let’s now go over what you should not do before a mortgage loan closes.

  1. Please don’t apply for new credit

Here’s the deal-your credit records can be accessed at any time during the loan approval process. The lender has access to your credit records up until your loan with the lender is closed. If there are any negative changes to your credit, this may negatively impact your loan terms at best and cancel your loan at worst. If you apply for other lines of credit or loans during this time, this may impact your credit score. If you get more debt while applying for a mortgage, then you will increase your debt-to-income ratio which also affects if you get a mortgage.

  1. Don’t switch your job

It is not advisable to change your job while in the process of applying for a mortgage. The problem is any income changes will have to be factored into the amount the lender is able to let you borrow. This may not be entirely in your control, but it’s still something to think about.

  1. Don’t make large purchases at all

Although you may want to go spending large sums of money on furniture, light fixtures, and cool kitchen applicants, wait one moment. If you pay in cash, then you will dent your savings, and buying large items will most certainly increase your debt-to-income ratio. Wait until after you close your mortgage deal to go furniture-shopping.

  1. Create a paper trail when making large deposits

Here’s the deal-large deposits potentially indicate to a loan underwriter that you have borrowed more money. This would increase your debt-to-income ratio and potentially jeopardize your mortgage. If you make a large (>€1000) deposit during the mortgage process, the loan officer must be able to track down its origin.

  1. Don’t miss payments on credit cards and loans

Please pay your bills on time. One of the most important factors when getting a loan is your credit score, and any late payments will drastically impact it.


This article was written by Ian, an intern at Irish Mortgage Brokers and Yes.ie from the USA.