You will not be the official owner of your home for at least thirty days after finalizing the transactions. Your credit company will check your score at least once before the closing date. The process of a mortgage loan in McKinney TX will require additional information during the procession period.
This setup means that you have a job to do, which will help in getting positive feedback. More importantly, specific actions should not happen during the entire process.
What not to do while awaiting mortgage approval
Deposit huge amounts of money
The apparent restriction is usually not to spend phantom quantities of cash. The most ignored precaution is that one should not deposit money in large sums and lack the proper supporting documentation. Try and keep the sudden windfall of cash away from your bank until the mortgage gets a closing date.
The only allowed large deposits should have a legal paper trail. Some loan underwriters will interpret an undocumented deposit as money from another loaning platform. The consequence of added debt is that your debt to income ratio will increase. Present the right papers to the loan officer if you have to deposit the gift or inheritance in the account.
Max out the credit card
The credit to debt ratio will increase when you pay for expensive items using the card. In the meantime, avoid using the card. Ensure that the rate is below thirty percent.
Close credit accounts
Closure of any credit account within the period of awaiting the closing date will have a negative ripple effect on the credit score. Even closure of dormant accounts will raise the debt to income ratio, and potentially harm the loan application.
Exhaust the home equity line
Purchases on home equity have an effect on the debt to income ratio. It will also highlight that you may have an unhealthy dependence on credit. The ultimate goal is to show the lender that you can repay the money because you live on earned income and not credit lines.
Cosign a loan
Co-signing a loan may seem like a harmless idea. The risk of such an agreement is that the person may default. The aftermath will reflect in your account as a negative credit score.
Leaving your job is a high risk while awaiting the mortgage. Switching to a new job may be as risky. A loan officer will always perform employment verification before approving a mortgage loan in McKinney Texas TX. A change in careers may come with fluctuations in income; hence, the loan will undergo compulsory revisions.
Make financial commitments
Leasing a new car in the face of a mortgage loan is bad for your credit score. Do not open a new account or switch money between accounts, as it is indicative of your intent to have additional financial commitments. Talk to a professional at The Elite Team to understand the right way of tampering with money before jeopardizing your chances of qualifying for a home.
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