Do's & Dont's

Get Pre-Approved for a Mortgage
Before you start house hunting, get pre-approved for a mortgage. It gives you a clear idea of how much you can afford and shows sellers you’re a serious buyer.

Check Your Credit Score
Lenders heavily rely on your credit score to determine your eligibility and the interest rate on your loan. Make sure your credit score is in good standing before applying.

Save for a Down Payment
Set aside as much money as possible for your down payment. The larger the down payment, the less you’ll need to borrow, which may result in lower monthly payments and better loan terms.

Gather Financial Documents Early
Start gathering all necessary documents such as tax returns, bank statements, pay stubs, and credit card or loan statements. This will help avoid delays during the application process.

Pay Off Small Debts
Reducing your overall debt increases your chances of mortgage approval. Paying off small debts can help improve your debt-to-income ratio, which lenders closely examine.

Be Transparent with Your Lender
Always provide accurate and honest information to your lender. If any changes happen in your financial situation, let them know immediately to avoid issues during underwriting.

Keep a Stable Job
Job stability is essential during the mortgage application process. Lenders prefer borrowers with a steady source of income, as it lowers the risk of default.

Stay Current on Your Bills
Make sure you’re paying all of your current bills on time. Late or missed payments can negatively affect your credit score and put your loan approval at risk.

Understand the Loan Terms
Take the time to fully understand the terms of your mortgage loan, including interest rates, repayment period, and any associated fees. Ask questions if you’re unsure.

Hire a Real Estate Agent
A professional real estate agent can guide you through the home-buying process, negotiate on your behalf, and ensure you’re making informed decisions about your purchase.

Don’t Change Jobs or Careers
Changing jobs can introduce uncertainty into your financial situation and might make lenders hesitant. Stick with your current job until the mortgage process is completed.

Don’t Make Major Purchases
Avoid large purchases like cars, furniture, or appliances before or during the mortgage process. These expenses could increase your debt and impact your loan approval.

Don’t Open New Credit Accounts
Avoid opening new credit accounts or applying for new loans while you’re trying to secure a mortgage. New credit inquiries can lower your credit score and raise red flags for lenders.

Don’t Move Money Without Documentation
If you transfer large amounts of money between accounts, make sure to document everything. Lenders need a clear financial trail to verify your assets.

Don’t Miss Credit Card Payments
Missing a credit card payment can drastically lower your credit score, which can affect your mortgage rate or even your ability to get the loan.

Don’t Make Cash Deposits Without a Paper Trail
Avoid depositing large amounts of cash into your bank account without a clear explanation. Lenders will need to verify where your money comes from, and undocumented cash deposits can cause delays.

Don’t Switch Banks
It’s important to keep your banking consistent during the mortgage process. Switching banks or moving funds between institutions can confuse the lender and slow down the approval.

Don’t Close Any Credit Accounts
While it may seem counterintuitive, closing a credit account could hurt your credit score. It reduces your total available credit and changes your debt-to-credit ratio.

Don’t Co-Sign Loans
Co-signing someone else’s loan can increase your debt-to-income ratio and reduce your ability to qualify for a mortgage. Lenders see co-signed loans as your financial responsibility.

Don’t Make Unexplained Withdrawals
Avoid making large, unexplained withdrawals from your accounts during the loan process. Lenders need to see stable financial behavior to approve your mortgage.