Mortgage Dos and Don’ts

We understand the temptation of wanting to begin making your new house a home or spending your new savings on fixing up your existing home, but now is the time to keep your finances stable until your loan with us closes.

We do not want you to do anything that will have an adverse effect on your home loan so please pay close attention to the DO’s and DON’TS below. As always, if you think you will be making any changes to your financial situation, contact your Loan Officer immediately.

Things to DO

  • DO respond to your Loan Officer’s requests in a timely manner to avoid delays in the process.
  • DO keep all existing credit card accounts open.
  • DO use your credit as you normally would. You don’t want to appear you are diverting from your normal spending patterns, it could cause your credit score to go down.
  • DO maintain your employment at your current job.
  • DO pay off collections, judgments, or tax liens reported within the last year.
  • DO stay current on your existing accounts.
  • DO call your Loan Officer!  He or she is there to help you through the loan process!

Things to AVOID

  • DO NOT leave off any debts or liabilities when filling out your loan application. The underwriter is trained to find such things and it’s important to be honest up front.
  • DO NOT change jobs. This includes quitting your job, going self-employed, or moving within the company.
  • DO NOT buy a new vehicle. This will put your loan in jeopardy.  It could cause your DTI (debt-to-income ratio) over the limit for the loan you are trying to obtain.
  • DO NOT spend the money you have saved for closing. Even if you are one of the lucky ones to receive your closing costs paid, you still may have a balance due at closing.
  • DO NOT buy a new refrigerator or anything else that might be considered a big ticket item. This will undoubtedly affect your DTI (debt-to-income ratio).
  • DO NOT apply for additional credit. Whether you’re getting a new cell phone, student loan, a new credit card, anything that would warrant a credit check, do not do it.
  • DO NOT use your charge cards unreasonably or excessively. Also, do not fall behind on payments!
  • DO NOT make any large deposits without first checking with your Loan Officer. Any large non-payroll deposits will need an explanation.
  • DO NOT change bank accounts.
  • DO NOT co-sign on any loan for anyone! This will definitely make you responsible for that loan and could increase your DTI (debt-to-income ratio).

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The information provided in these articles is not intended to be construed as investment advice. First Federal Bank, does not guarantee or warrant the accuracy or completeness of the information or opinions expressed herein. You should always conduct your own research and due diligence and obtain professional advice before making any investment or mortgage related decision. Please reach out to one of our mortgage loan specialists to discuss this information further.