You’ve received your pre-approval for your home loan—congratulations! Now, you’re ready to start looking for your new home. Yet, one of the most important “next steps” is actually something you SHOULDN’T do.
If you recall the process for getting pre-approved, you’ll remember that one important piece of information used to determine your eligibility and pre-approved loan amount was your credit score. Did you know that before a lender can completely approve the mortgage, your credit score (and other financial factors) will be checked again?
This is precisely why that between the moment you’re pre-approved and the closing date, it’s best to maintain the status quo. As you continue to move forward in securing your home loan, keep in mind that nothing is guaranteed until you sign your closing paperwork.
In addition to your credit score, some of the key factors that enabled you to get pre-approved include your income, debts and other assets you have. If any of these criteria change from when you received your pre-approval to when your home loan closes, it could affect your pre-approval.
For example, if something negative hits your credit report, it could lower your score below loan guidelines. Or, if you go on a shopping spree and your debt level significantly rises, it could push your debt ratio outside of the acceptable threshold. Fortunately, there’s a simple way to avoid these financial mishaps: Again, you need to maintain the status quo.
Simply put, don’t make any changes that could negatively affect your income, assets, debt level or other financial factors until you close your home loan. We strongly recommend that you:
- Don’t tap into your savings account or reduce your current assets.
- Don’t switch jobs.
- Don’t increase your debt—that includes opening any new loans or credit cards.
- Continue to put as much money aside as possible, in case your closing costs are higher than estimated.
By maintaining your financial status quo, you’ll be at the closing table in no time!
If you have questions about getting a pre-approval, what might put a pre-approval at risk, or anything related to buying a home, call or email our expert, Amy Clark. She is ready to answer your questions and help you on the road to buying a home, call her at 765-960-8618 or email her at aclark@pccu.com today!