5 Mortgage Deal Killers to Avoid

Whether you’re just thinking about getting a home loan or are in the middle of applying for one, there are some essential things NOT to do. 
Read on to discover the pitfalls to avoid so you can make sure you get the loan you want!

1. Don't Buy Big-Ticket Items

Lots of new homebuyers make the fatal mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the lender approves the loan. 

You may be tempted to buy that new big screen TV for the soon-to-be-yours living room. But until your loan closes, it's best to stay away from making major purchases like: 

  • Furniture
  • Appliances
  • Electronic equipment
  • Cars 
  • Boats

 Your credit score could change suddenly and drastically if you rack up more credit card debt, so you want to avoid that for sure!

2. Don't Open Any New Credit Accounts

It’s so easy to be tempted to apply for a new credit card or store account so that you can save money, but DON’T do it!  Having your credit pulled could lower your score and make it, so you don’t get your loan. 

You don’t want to get to the end of the loan process and ready to move into your home only to find out that now you don’t qualify because you have too much credit card debt. 


3. Don't Start a New Job or Career

When reviewing your home loan application, the underwriter is going to be looking closely at your work history to make sure it’s consistent. Although embarking on a new career (particularly one with a bigger salary) may not affect your ability to qualify for your mortgage, it’s essential to check with your mortgage broker first. 

The same holds true for switching jobs during the loan process because that could influence whether or not you are approved. Gaps in employment, a job, or career change could kill the deal.

The thing to remember is: Before you make any changes – ask your loan officer.

4. Don't Change Banks or Move Finances Around

While the lender reviews your loan application, you will probably be asked to produce bank statements for the last two or three months. 

That would include all of your accounts including

  • Checking Accounts
  • Savings Accounts
  • Money Market Accounts
  • Other Liquid Assets 

The underwriter wants to see a steady rise and fall of your money over the month, in the interest of ruling out fraud. For example, a large cash deposit would be a red flag, mainly because cash (or even a large check) could be difficult or maybe even impossible to verify where it came from.   

Switching banks or transferring finances to another account - no matter the purpose – makes the review of your funds harder and could hurt your ability to qualify. 

5. Don't Deliver a Deposit Directly to the Seller 

When you’re buying a property directly from the owner in a FSBO (For Sale by Owner) make sure you put the earnest money deposit into a trust account or with an attorney. 

This because your good faith deposit does not belong to the seller. In fact, it’s actually yours until the sale closes and it to be used for your closing expenses. 

At Clearwater Mortgage, we recommend that you put the funds into a trust account, or get an attorney or title company to hold them until the deal closes. If your home purchase fails, the purchase agreement should dictate where the earnest money should go.

We answer questions about this process every day. Give us a call at (727) 259-2900.