You Just Got Pre-Approved! Now What?

Congratulations! You’ve applied for a mortgage and you’re on your way to having a new home. The excitement sometimes becomes a distraction from the goals ahead, and we get carried away, ultimately setting us back if we aren’t careful. So before you make any significant financial decisions, have a conversation with your loan officer first.

Below is a list of 7 Things You Should NOT Do After Applying for a Mortgage! Some may seem obvious, but some may not!

1. Do NOT change jobs or the way you are paid at your job! Your loan officer must be able to track the source and amount of your annual income, and you will need at least two years of employment to trace back. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Do NOT deposit cash into your bank accounts. Lenders will need to source your money and cash is not easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Do NOT make any large purchases like a new car or new furniture for your new home. New debt comes with these purchases, including new monthly obligations. New obligations create new qualifications that weigh on your ability to borrow. People with new debt have higher debt to income ratios… in turn making for riskier loans… and sometimes pre-qualified borrowers will no longer qualify with these increased risks involved.

4. Do NOT co-sign other loans for anyone. When you co-sign, you are obligated for repayment of that loan. As earlier mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will still be required to count the payment against you.

5. Do NOT change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.

6. Do NOT apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Do NOT close any credit accounts. Many people have believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of how your score is calculated is based on your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.

Cedar Rapids Homes for Sale: Ashley Letsch, Real Estate Agent with Exit Eastern Iowa Realty in Cedar Rapids, Iowa. Advocating for Sellers and Buyers with Professional Real Estate Services. Nothing Compares to having a Real Estate Advisor on your Side Providing True Data and Research to make an Informed and Educated Decision. You can get Information about Real Estate in Linn County and Jones County, as well as Specific Requested Areas in Eastern Iowa; by Contacting me at: 319-450-8785


Ashley Letsch REALTOR®
Assisting Buyers and Sellers
Download Your Free: Buyer GuideSeller Guide
319-450-8785
1965 51st St NE
Cedar Rapids, IA 52402
Licensed in Iowa

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