You found a great mortgage lender- hallelujah! They were knowledgeable and friendly and gave you valuable insights and found you the perfect mortgage based on what you want to put down and based on what you want to pay monthly. Party time!
Now, you have your preapproval in hand and are ready to put that house-hunt in high gear. What's the first thing to keep in mind as you start your search?
The answer is................... "Be boring for a while."
What does this mean? Now that you've been preapproved, it's vital not to do anything that makes the lender decrease your buying power or decline your preapproval altogether.
Here is how to avoid accidentally tanking your mortgage approval, with a little less lecture and a lot more strategy:
- No Shopping Sprees: Do not buy that 2017 Ferrari that's a "great deal" that just landed you a $2000 car payment for the next 7 years.
- Keep Your Day Job: Hold off on quitting or changing industries. And worst of all, do not quit your W2 job and start your own business. Your new self-employed income won't be allowable on a mortgage application for 1 or 2 years from your start date.
- Put the Deep Freeze on Your Credit: Do not open new credit cards or close old ones out of nowhere. These actions can drop your credit scores.
- Cash is Not King: Do not deposit random cash into your accounts. When you're old friend from college finally pays you back that $3000 he borrowed junior year, either keep that money at home or put it in a bank account you don't use that often and that you won't be using for your down payment money.
- Pay Bills Early: Set everything to autopay so a single late fee does not drop your score.
Keep these 5 things in mind as you start your house-hunt and you'll be inviting friends over for that big house-warming party in no time.
