By Heidi Lee | September 23, 2019 |  #mortgagebasics #mannmortgage #homeloan 


You finally found that gem of a home you’ve been searching for, and you’re ready to start decorating. You have been eyeing the riveted leather sofa at the neighborhood furniture store, and have thought about how great it would look in that sunny corner by the screen door. But wait! If you are planning to purchase the couch on credit, you may jeopardize your ability to close on your mortgage loan. 


Even though you have already been pre-approved, there are a variety of actions that could affect your home loan. It’s tempting to purchase new items on credit at the time of need, but first ask yourself if your new item will appear on you credit report. If you believe it will, the smart thing to do it wait. 


1. Don’t miss payments  

This one may seem obvious, but avoid being late on your mortgage or credit card payments. If you have a 30-day late payment, it can negatively impact your credit report by many points. Make sure you have all of your medical bills, parking tickets, and utility bills up to date and paid. 


2. Don’t apply for new credit or adding to your balance

One of the factors used in credit-worthiness is your credit card utilization, which is your balance amount and credit-limit percentage. Both your payment history and your credit card utilization are weighed heavily to comprise your final credit score. If you max out a low-balance credit card, it can cause your FICO score to drop dramatically. 


3. Don’t switch jobs 

Stability is the name of the game when applying for a mortgage! Proof of income in the same field is a requirement to secure a mortgage, so don’t switch jobs until your loan has closed. If you must switch jobs at this point in time, talk to your loan officer to determine the effect on your application.  


4. Don’t move money around  

Moving can be expensive, so you might be tempted to move some of your money from one account to the other to cover expenses. It might seem like a small thing, but even small financial changes can make the bank a bit nervous. Because of this, it is best to leave your funds where they are until your mortgage loan has closed.


5. Don’t make payments on collection accounts   

You are in the process of moving into a new house and taking on new financial responsibility, so now might seem like a great time to make payments on your old accounts, or to close your unused credit accounts. In normal circumstances, it is fiscally responsible to make payments on your old collection accounts. But by doing this now, you are updating your collection account to a “current” status. It seems counter-intuitive, but don’t revive your collection accounts by making a payment on them until your mortgage loan has closed. 


If you have a unique situation, just ask!  


Each individual has their own unique financial situation, so if you have a hunch that something might affect your mortgage application, don’t hesitate to ask your mortgage loan officer their thoughts on the matter.  


So, at what point can you starting applying for new credit? Once you sign the final mortgage closing documents, you are free to apply for new credit or move your money around. However, be aware that your credit score may take a while to stabilize after securing a mortgage. It can take a temporary dip until you have established a monthly mortgage payment history, so you may want to wait a little while until you apply for a new type of credit. 


Your Local Mortgage Experts

Mann Mortgage is a family-owned company that emphasizes community relationships, honesty, and integrity. When you do  business with us, you’re supporting your local workforce and economy. Your local Mann Mortgage branch is dedicated to making your experience both personalized and hassle free.  


Reach out to us if you would like to apply, or simply need advice on how to achieve your goals.  As a national direct lender, Mann Mortgage offers a variety of home loan solutions, including FHA, conventional, USDA, and first-time homebuyer loans. We’ve also made applying online simple, with our SimpleApp online interface that will guide you through the process step-by-step, all with bank-grade security. 


This ad has not been reviewed or approved by HUD/FHA/VA or any other government agencies.