Getting preapproved for a mortgage and actually getting a mortgage loan are two different things. A preapproval means that a lender will give you a mortgage loan as long as nothing changes with your credit, debt, assets, and job. Because of this, there are several things you should avoid after getting preapproved, because these things may prevent you from getting approved for the actual loan when the time comes. Here are four things you should avoid doing.
Finance something big
Applying for new lines of credit and using the lines of credit can make your financial situation look worse than it did when you received notification that the lender preapproved you for a loan. Buying a new car, boat, or RV on credit will make it appear that you are less likely to be able to afford to pay a mortgage, and this is why it is something you should avoid doing before you close on your mortgage loan.
Close out old accounts
Closing out old accounts may seem like it will have no effect on your credit, but it can. The credit lines from these accounts were taken into consideration when the lender viewed the amount of credit you are using compared to the amount you have. When you close old accounts, you decrease your amount of available credit, and this can make your financial situation look worse than what it is.
Fail to pay your bills
If you end up with a late payment mark on your credit report, it will cause your credit score to drop. Payment history makes up 35% of your current credit score, and you should aim to keep all your bills and payments up to date, especially before you close on your mortgage loan.
Switch jobs
Switching jobs before you get your loan may also have a negative impact on your ability to get a loan. Lenders like to see at least 24 months of consistency in a borrower's job history. If you switch jobs, it may appear as though your income is not reliable or consistent, especially if you switch to a job in a completely different line of work. If you are looking for a new job, you may want to postpone your search until after you get your loan.
If you do not want to risk the ability to get a loan to buy a house, talk to a lender to find out what else you can do to make sure you will qualify for a loan. To learn more about buying a house, contact a real estate agent and lender today.
