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Things To Avoid In The Mortgage Application Process

Gustan Cho Associates
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Things To Avoid In The Mortgage Application Process

This BLOG On Things To Avoid In The Mortgage Application Process Was UPDATED On June 13th, 2019

Things To Avoid In The Mortgage Application Process
Gustan Cho Associates

Buying a new home is an exciting time for the home buyer and their family. However, there are Things To Avoid In The Mortgage Application Process:

  • The home buying process does not have to be stressful
  • The thought of applying for a mortgage, getting insurance quotes, decorating the new home, and changing schools for children as well as making new friends can be overwhelming
  • The toughest and most stressful part of buying a new home is probably the mortgage application process
  • Just because a home buyer is approved for a mortgage loan does not guarantee that the mortgage loan will get a clear to close and close on a home loan
  • There are many things that can potentially go wrong to delay home closing due to simple mistakes

In this article, we will discuss things to avoid in the mortgage application process.

What NOT To Do During Mortgage Application Process

What NOT To Do During Mortgage Application Process
Gustan Cho Associates

Here are some basics Things To Avoid In The Mortgage Application Process:

  • Do not apply for new credit
  • Do not purchase any high ticket items
  • Avoid hard credit inquiries
  • Do not buy new furniture
  • Do not charge items on credit cards
  • Do not purchase a new vehicle 

Other Things To Avoid In The Mortgage Application Process

Other Things To Avoid In The Mortgage Application Process
Gustan Cho Associates

Other things to avoid in the mortgage application process is not to charge up credit cards.

  • Most home buyers are excited about decorating their new home and go nuts in charging up new furniture and appliances
  • Having high balances on credit cards will lower credit scores and will increase debt to income ratio
  • For those borrowers who have high debt to income ratios, having a higher credit card balances will definitely affect their credit scores and increase their debt to income ratio
  • Borrowers who are on the borderline debt to income ratio, this higher credit card balance can trigger a mortgage loan denial
  • This includes not making any purchases in general, whether it is on credit or cash

Avoid High Ticket Item Purchases

Avoid High Ticket Item Purchases
Gustan Cho Associates

Other things to avoid in the mortgage application process is never to purchase a high ticket item such as an automobile.

  • A new car payment will definitely affect your debt to income ratio
  • I have witnessed dozens of cases where a borrower got their mortgage loan denied due to the new car payment
  • Never, never, never finance a new car during the mortgage process
  • It is probably one of the most important things to avoid in the mortgage application process

Changing Jobs During The Mortgage Process

Changing Jobs During The Mortgage Process
Gustan Cho Associates

Other important things to avoid in the mortgage application process is not to change or quit a job.

  • I just had this happen to one of my fellow loan officers where his client just quit her job prior to closing their loan
  • The mortgage loan was immediately suspended and the closing got delayed indefinitely
  • Home buyers who are thinking of changing employment and want to close on the mortgage loan, you cannot be thinking of changing jobs before a home closing
  • On this case, the client got another job she will be starting next week but unfortunately, need to wait 30 days until she can provide recent paycheck stubs

Pay Bills Timely

The most important things to avoid in the mortgage application process is never to be late with any monthly payments.

  • One late reported to a credit reporting agency will drop credit scores by at least 30 points or more and mortgage loan to get denied.

If you have any questions please contact me at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com or visit me at www.gustancho.com. Gustan Cho Associates at Loan Cabin Inc. are direct lenders with no lender overlays on government and conventional loans.

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