5 Pre-Approval Mistakes To Avoid
You’re pre-approved for a loan – congratulations! You’ve just taken the first step to your new home.
While a pre-approval guarantees that your lender could provide you with a loan in that amount, it only applies to your financial situation at the time of the pre-approval. Meaning, if your financial situation changes drastically from the day you’re pre-approved to when you find a home to make an offer on, your pre-approval may not still stand with the same terms.If your financial situation changes drastically from the day you’re pre-approved to when you find a home to make an offer on, your pre-approval may not still stand with the same terms. Click To Tweet
To avoid this unpleasant surprise, don’t make any of these all too common pre-approval mistakes.
Applying For New Credit
After being pre-approved, don’t apply for a new credit card or loan. And yes, store credit cards count. Not only do the credit checks required to get a new line of credit temporarily ding your score, but being approved for a new line of credit can change your credit score and/or your debt-to-income ratio.
Making Major Purchases
Of all of the pre-approval mistakes listed, we’d say this is one of the most common. We know that you’re excited for a new home, but it’s important to not go out and buy new furniture. Your purchases can affect your debt-to-income ratio when bought on credit and can reduce the amount of your assets when bought with cash.
Moving Large Sums Of Money Around
During the pre-approval process, making large deposits or moving around large sums of money can delay the process. Your lender won’t ask for documentation for deposits from a verifiable source like your employer or an IRS tax refund. However, if a friend happens to pay you back the $700 she owes you, you’ll need to be able to prove where it came from.
Co-Signing On A Loan
You may think that co-signing on a loan is harmless, but the loan is considered a debt for both parties, especially on new loans. That means co-signing on a loan can negatively affect your debt-to-income ratio.
Quitting Or Changing Jobs
We use pay stubs to verify your employment for a loan. So, changing jobs after being pre-approved can result in a big delay.
As you can see, there are quite a few pre-approval mistakes to avoid. We advise all of our clients to consult us before making any financial decisions during the pre-approval process.
Ready to get pre-approved for a loan? Give us a call at 402-991-5153, any time day or night. We’d love to answer any and all of your questions.