The process of applying for a home loan and buying a house involves many nerve-wracking steps, and you need to know exactly what you should do along the way. But on the financial side of it, you need to be aware of what you should not do. Once you’ve applied for a mortgage loan, you definitely want to steer clear of those actions that could jeopardize your financial status and financing. To help you out, then, here are 3 things to avoid after applying for a home loan in Miami.
1. Making Major Purchases
The first thing to avoid after applying for a home loan in Miami is making any major purchase, especially if it requires credit or financing. This should be fairly obvious, but it’s a temptation that’s difficult to resist sometimes. Once they’ve found the perfect home, it’s easy for eager buyers to begin purchasing new appliances and furniture to go in that home. But don’t do it.
Any such major purchase will require a good amount of cash or credit or both. And that could, in turn, affect your mortgage pre-approval, which was determined on a specific set of criteria such as cash reserves, debt-to-income ratio, and assets. Any significant change in these could jeopardize your mortgage financing and may keep you from closing when you expected – or at all. So after applying for a home loan, just don’t buy anything that will deplete cash reserves and/or increase your debt-to-income ratio.
2. Applying for New Credit and/or Paying Off Charges/Collections
And here are two other closely related things you should avoid after applying for a home loan: applying for new credit and paying off charges/collections.
Today, we are bombarded from all sides with credit opportunities. From the local big-box store to a host of credit card companies, we are daily tempted by these offers. But don’t fall victim to this. Remember that your financing and pre-approval are based on a specific credit profile and score, and new credit could change those. The result could be derailing your mortgage loan approval and process.
Although it may seem counterintuitive, you should also avoid paying off charges or collections after applying for a home loan. Again this could change your credit profile and score and then jeopardize your financing to buy a home.
3. Changing Banks and/or Making Unusual Deposits/Withdrawals
The third thing to avoid after applying for a home loan in Miami is changing banks. Applying for a mortgage requires that you provide a host of documents, which includes bank statements. Your lender wants to know that you have the funds for a downpayment and for closing. If you change banks, you’ll have to go through this process all over again, and this, of course, will delay your home purchase.
In addition, you should avoid making any unusual deposits or withdrawals, especially large ones. Even though it may seek like a good thing on the face of it, a large deposit will have to be sourced, which could mean delays in your financing. And, of course, a large withdrawal would deplete the cash reserves your pre-approval was based on.
The Best Course . . .
The best course of action for most home buyers is to work closely with an experienced Miami agent. Although your agent isn’t a financial advisor, she knows the home buying process in and out and can help you avoid any actions that may jeopardize your financing. A good agent with a large professional network can guide you to the best financial professionals you may need. If you’re in the market to buy a home and want to avoid costly mistakes after applying for a home loan in Miami, be sure to contact us today at 305.771.1710.