What NOT to do when applying for a Mortgage

If you are thinking about purchasing or refinancing, there are some things that you should not do. Now is the time to keep your financing stable and unchanged until after closing. If you need to make any changes to your financial situation, you should always call your qualified Raleigh Mortgage Group Loan Officer at 919-866-0212 to discuss the changes to ensure that your loan is not at risk of being denied or suspended.

DO NOT STOP PAYING ON YOUR EXISTING ACCOUNTS
Late payments on your existing accounts can be reported to the three credit agencies and can put your loan at risk. One 30‐day late payment can lower your credit score by 30‐75 points and get your loan denied.

DO NOT APPLY FOR NEW DEBTS
Applying for any new debt during your loan process can sabotage your loan. New monthly payments will affect your debt-to-income (DTI) ratio and could affect your interest rate or get your loan denied.

DO NOT CO-SIGN A LOAN FOR ANYONE
Whether you are making the payments or not, the Lender will look at that debt as if it is your debt and it will be calculated into your debt-to-income ratio and could disqualify you for your loan.

DO NOT MAX OUT YOUR CREDIT CARDS
Maxing out your credit cards is the fastest way to lower your credit score. When applying for a loan, keep your credit cards below 30% or lower then available limit.

DO NOT CLOSE ANY ACCOUNTS
Closing any accounts can have a huge impact on lowering your credit score. Once an account is closed the damaging information is held against you and good history will no longer positively effect your credit scores.

DO NOT MAKE RANDOM, UNDOCUMENTED DEPOSITS INTO YOUR BANK ACCOUNTS
Keep good records of large deposits other than payroll deposits and avoid moving money around from different accounts. Avoiding this will increase your chances of a smooth and easy loan process.

DO NOT MAKE CHANGES WITH YOUR EMPLOYMENT OR INCOME
Employment stability is key during the loan process. Quitting, changing jobs or even positions within the same company can greatly put your loan approval at risk. This is especially important for commission employees as they must have a two year history to calculate their income.

For more information please call Raleigh’s Local Loan Experts at 919-866-0212 to answer any questions you may have!