If you are really serious about buying a home here are some things you should not do when applying for a mortgage.
The first step to the home buying process, unless you are paying cash is going to be to find a lender. Without proof of funds or a letter from a lender showing that you theoretically qualify for a mortgage your offer on a home will not be accepted. No seller is going to take a chance on a buyer who has not even started the mortgage process because that process is not easy at the best of times.
When you first talk to a lender they will require information from you which will include a bunch of financial information, for example:
- Employment history
- Copies of pay stubs and W2s or, if self-employed, 1099s and tax returns from the past two years
- Verification of other income
- Copies of bank statements, stocks, retirement accounts etc.
- Credit card information
- Any loans, such as mortgages, installment loans, etc.
This will be information on which determination of your ability to qualify for a loan will be based. You should do nothing to impact the information you have provided to the lender because if anything changes during the time your loan application is being processed your loan could end up being denied or its terms, may change.
So, what should you not do when applying for a mortgage?
- Do not change or quit your job, and do not become self-employed.
- Do not make any major purchases such as an automobile.
- Do not overuse your credit cards, make any large purchases on credit, or get behind on payments.
- Do not use any money you have set aside for your downpayment.
- Do not leave out any debts or liabilities from your loan application.
- Do not make or permit to be made any inquiries into your credit.
- Don’t suddenly make any large deposits into your accounts before checking with your loan officer.
- Do not change bank accounts.
- Do not guarantee or co-sign a loan for anyone.
Many a loan qualification or approval has been derailed because the applicant was not aware of one or more of the above warnings. If you are really serious about buying a home then all your focus should be on ensuring that your financial integrity remains intact.