Things NOT to do during a Mortgage Transaction

Ensure a Smooth Home Buying Experience by Avoiding These Common Pitfalls

 

  • A Realtor® has a fiduciary duty to your best interests and to the industry. It is in your best interest to use a local license Michigan real estate pro!

  • Avoid large purchases, like cars or furniture, before closing on your home. They can reduce your savings and impact your debt-to-income ratio, risking loan approval.

  • Applying for new credit cards or loans can lower your credit score and increase debt, negatively affecting your mortgage approval and terms.

  • If you need to make a large deposit into your bank account, be prepared to explain and document where the money came from. Unexplained deposits can raise red flags for lenders.

  • Lenders prefer stability. Changing jobs during the home-buying process can raise concerns about your ability to make mortgage payments, potentially impacting loan approval.

  • Pay bills on time. Late payments can harm your credit score and indicate to lenders that you might be a risky borrower.

  • Closing credit accounts can decrease available credit and raise your utilization ratio, potentially lowering your credit score. Lenders consider your credit history and available credit during approval.

  • Switching bank accounts can complicate the documentation process for your loan. Lenders need a clear and consistent view of your financial history.

  • Skipping a home inspection to save money can lead to unforeseen expenses. Inspections can reveal potential issues that need addressing before finalizing the purchase.

  • Submitting your income and asset documents on time is essential. Delays can slow down loan approval and complicate closing on your new home.