First things first, congrats on taking a big step! Don’t worry, you’ve done everything right so far; you’ve found a great lender, received a pre-approval and submitted your loan package for final approval. Phew! Now you can relax, right? Sorry friends, not quite. Until you close on your new loan, it’s more important than ever to keep your credit steady; most lenders perform one last credit check right before they grant final approval and a decline in your score can mean the difference between getting the home and losing the loan.
What exactly should you avoid to ensure you remain on the up and up with lenders? Things you should avoid after applying for a home loan:
- Don’t Change Jobs – This one lands in a bit of a grey area for anyone relocating and may be unavoidable. However, any change in income or job status creates risk and should be avoided if possible.
- Don’t Make any Large Purchases – You are buying a house so new furniture and decor is in your future, right? As tempting as it may be, wait until after you close to make any large purchases. This applies to furniture, appliances and even new cars. New loans could change your debt to income ratio and cause you to no longer qualify for the loan.
- Don’t Apply for New Credit – While this is somewhat on the Credit 101 side, it can be easy to forget. Especially when you get swept up in such a life changing process. Just remember, that every time someone runs your credit report, your score is affected. This is not the time to search for a new credit card.
- Don’t Close Any Credit Accounts – Talk about counterintuitive! Closing or paying off loans or credit cards might actually bring your FICO score down. How does that happen? Well, the length of time you’ve had your credit open is actually a positive effect on credit scores.
Bottom line — avoid doing anything to your credit. If you’re unsure of what you can or cannot do, ask you lender; they can guide you in the right direction and make sure you close on your new loan.
“Anytime between “now” and “right now” is a good time to take action on shaping your best life, and that includes where you live. Let’s get the ball rolling on your next steps.“
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