You’ve just been preapproved and are ready to buy a home. Congratulations!
Take the time to celebrate your preapproval, then start looking at the next steps. With great newly-appointed-buying-power comes great responsibility. If you’re not certain how to proceed, worry not. United Atlantic Mortgage is here to help.
Preapproval Don’ts:
Do Not buy shiny new things until after your loan has closed. You’ve found your dream home and are ready to start filling it with pieces of your dream life. We understand the strong urge to immediately furnish your new house, but be warned: doing so could adversely affect your income-to-debt ratios.
Do Not open any new lines of credit. More debt means less buying power, and could disqualify you altogether! Wait until after your loan closes to make any major purchases, like that cherry-red hot rod you’ve had your eye on.
Do Not put large sums of cash in your account. Lending institutions need to be able to trace any funds that you put into your bank account and cash is not traceable. If you do get a large sum be sure that it is not cash and that it can be traced back to the source. Check with your loan officer to decide the best way to handle large deposits.
Do Not close any of your credit accounts unless you’re instructed to do so by a loan officer. There is a misconception among consumers that less credit is better. One of the largest factors in determining good credit is the length of your credit accounts and the ability to pay those accounts successfully. If you are unsure about what accounts to pay down, your loan officer would be happy to discuss strategies to get your credit in order.
Do Not open new bank accounts. Remember that all funds have to be accounted for when creating your loan, and the more accounts you have, the more accounts for which you are responsible. Simplify the loan process for everyone involved: keep existing accounts, keep transfers to a minimum, and keep all funds traceable.
The best part of buying a new home is how fresh and new everything feels – but Do Not get too carried away. Spending sprees and new lines of credit are like kryptonite to preapproval, and could end up causing more trouble than they’re worth. Remember: an inch of prevention is worth a pound of cure.
That’s why United Atlantic Mortgage recommends using one of our experienced loan officers, who process these types of loans every day. Your UAM loan officer can advise you on what will adversely affect your preapproval, and then steer you in the right direction.
UAM is always a quick email or phone call away. Reach out to us at 757-340-LOAN.