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10 Things NOT to Do When Applying for a Home Loan


More often than you would believe, a buyer does something that results in delaying their closing, or worse, the purchase fails because the buyer no longer qualifies for their loan.

Today’s buyers tend to begin their home-buying process by browsing listings online and popping into open houses on the weekends. While this is a great way to get to know the inventory, the financial aspects of a purchase are often postponed, or the importance of maintaining an approval status is minimized. Unaware of the complexities involved in obtaining a home loan, buyers may later encounter obstacles as a result of innocent actions on their part that have negative consequences.

One of the first steps a buyer should take is to speak with an experienced loan officer and begin the loan approval process. While it's possible these days to complete most of the loan application process electronically, I highly recommend requesting a consultation in person with your lender. If face-to-face meeting isn’t possible, request a consultation via phone so she/he can thoroughly review the process and discuss the do's and don'ts that can improve, or jeopardize your loan approval. If you are co-borrowing, set a time when all buyers on the loan are available for the consultation.

By aligning yourself with a seasoned REALTOR like myself from the beginning, you'll be guided throughout the entire purchase process. If, however, you’re not quite ready to venture beyond online browsing and open houses, read on to avoid problematic issues with your loan when you’re ready to buy.

Here are the top ten things not to do as you are preparing for a financed purchase:

  1. Do not change your job or become self-employed. Make any career changes after closing.

  2. Do not make any large deposits into your bank account.

  3. Do not buy a new vehicle unless you plan to live in it.

  4. Do not use your credit card for any large purchases. Usual and ordinary activity is generally fine, but use your cards sparingly and don't be late or miss any payments.

  5. Don't spend any of the money you have saved for your down payment.

  6. Don't buy any furniture, appliances or make any other purchases for the new home prior to closing. Avoid buying anything that can wait until after you close your loan.

  7. Do not originate any new inquiries on your credit lines (no new cards, no pre-approvals for other purchases such as car, furniture, home improvements...)

  8. Do not change bank accounts or otherwise move your money around.

  9. Do not co-sign for anyone else for credit or for purchases.

  10. Do not switch lenders once you are under contract on a home.

Have a question as to whether something you want to do (or have done) will affect your loan approval? Contact me. I'm here to help.

Tamara Z (Zyhylij), GRI, CNE, REALTOR, ePro


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