The Marketplace
Home Mortgage Blog
loan pre-approval

Five Things to Avoid When Seeking A Loan Pre-Approval

When you are preparing to buy a house it’s important to make sure your finances are in order and well-documented.  There are a number of things you should avoid doing financially as you prepare to seek a loan pre-approval, and some of them might surprise you.   Even after you have been pre-approved you should be cautious to make sure that nothing disrupts your final closing. Here are five things you should not do to ensure a smooth loan process.

  1. Don’t Apply For New Credit

    Changes in credit can cause delays, change the terms of your financing, or even prevent closing. If you must open a new account (or even borrow against retirement funds) consult your Loan Officer first.

  2. Don’t Change Jobs

    Probationary periods, career changes, or even status changes can be subject to very strict rules when it comes to mortgages. This includes changing from a salaried to a commissioned position, requesting a leave of absence, or accepting a new bonus structure. If you think a change in your job might affect your ability to secure financing speak with your Loan Officer.

  3. Don’t Make Undocumented Deposits

    Primarily large but sometimes even small deposits must be sourced unless they are identified. Make copies of checks and deposit slips. Keep your deposits separate and small. Avoid depositing cash.

  4. Don’t Wait to Liquidate Funds From Stock or Retirement Accounts

    If you need to sell investments, do it right away and document the transaction. Don’t take the risk that the market could move against you which could leave you short of funds to close.

  5. Don’t Ever Be Afraid to Ask Questions

    If you’re uncertain about what you need or what you should do, your loan officer will be there to help you through the loan pre-approval process, even long before you intend to buy.