Don’t Make These Moves After Getting Pre-Approved for a Mortgage

Hey guys, welcome back to another week of Mortgage Matters and Minutes. I'm your host Brent Rasmussen, owner of Mortgage Specialists. So, today we're going to talk about what not to do after getting preapproved. And this is a constant conversation that realtors have with their buyers, with us and our buyers and borrowers. and sometimes it's a conversation had without borrowers and buyers that comes up just to make sure people are trying to do and protect that transaction from getting to closing. So before we get into it today, if you are liking our information, please hit that subscribe button below. Leave us a comment, ask a question below about a new topic. We'd love to hear from you. We'd love to have you check us out each and every week because this information we feel is direct from the source and is accurate for you in purchasing real estate as a residential home. So preapprovals, let's first talk about what it means to become preapproved. Preapproved in simple terms means a loan officer has looked at your credit, maybe your income and your assets and said you qualify for a loan. The reason why I say maybe is because most people believe that every loan officer has looked at all of your information to ensure you qualify. That's what we do at mortgage specialists. But I can tell you a lot of lenders do not do pre-approvals that way. They take people's word for their salary. They take people's word for having the down payment money. So on and so forth. And then when there's a last minute problem, you might find out that they didn't review everything early on to the pre-approval process. I think people see the word approval and they feel like the loan is done. It's already been finished. Everything's good and approved. And really, it's just reviewing a certain things before the process. So, when we give out that pre-approval letter here, generally, we don't see our clients having problems with these things, but it's good to talk about them to know what could come up or if you do make changes, how a pre-approval letter can be voided very simply and easily because a pre-approval just states you meet the rules to obtain that mortgage loan. So, first of all, don't open up any new credit. You can use the credit cards that you have and the credit lines that are already available to you, but don't go to Nebraska Furniture Mart or Lowe's or Home Depot and open up a new credit card and put all your appliance on there. Or don't go get a new car loan or lease throughout the process as well. Why does that make a difference? First, it could lower your credit score. But what we're more concerned about is your payments on those accounts now go against your income, which is called your debt to income. And it might take you above the threshold to qualify. Where at a pre-approval, there might have been a number that they calculated you were fine once you took out the new debt. It might not allow you to qualify for that same home price. So the biggest one we do see generally speaking is individuals opening up new credit. also making large deposits into your account or moving money around without documentation. The key word there is without documentation. You can move money around, but no, you have to prove and show where it came from originally, what accounts it went through, so on and so forth. A lot of people will log into their account, print off a screen, and say, "Here's it went from here to here." Well, there's no sometimes documentation to show that's your account number. That's your name on there. That's the transaction. So on and so forth. So by not moving around accounts is much easier on paperwork for you. If you have three or four or five accounts, leave the money in those accounts, we can add up all those monies to be able to be used, say, for down payment or closing costs or whatever the case may be. A lot of the moving around of money falls under anti-money laundering and they're worried about individuals taking cash, getting it in the system, and not proving where the money truly came from from maybe illicit sources or something like that as well, too. Number three, changing your jobs without talking to lender. Changing jobs could be totally fine, but if you go from a salaried position to now being self-employed or hourly salary to being now commissioned could be a big problem. And so it depends on how you receive your income more than what your job is. So it doesn't matter that you move from one job of salary to another job of salary. That's not going to be a problem. But if your pay is changing to salary, to commission, bonus, overtime, self-employed, that's where the problem is going to be is we might not be able to use those incomes per what the underwriting rules set forth. Or obviously coming back to credit, don't miss any payments. Continue to make all of your mortgage payments on time, your credit cards, your student loans, car loans, every credit account, you want to continue to make payments. If for some reason there is a late payment shows up, that credit score could drop 50 to 100 points overnight might make you not qualify for that loan or definitely going to give you an higher interest rate. Five, again, don't go take out new debt with anyone, i.e. cosign, whether that's a car, whether that's an apartment, whether that's a credit card, any and all the above. Again, do not open up any new credit, even if it's not yours. Some people may be told, "Hey, it's not going to be my credit. I'm just putting my name on it." No, you're still liable just like they are for that particular account as well. Don't quit your job. we know and talk about people moving around jobs, but we want to talk through that. Or don't go into retirement or don't take on a brand new position that changes and makes it look like per HR that you're not working at that institution anymore. So, keep your financials the same, keep your income the same, and keep your assets the same, and keep your credit the same. So, last is assuming that you're fully approved, stating that you've already given a lot of paperwork up, you've reviewed everything, underwriting has been through and checked off most of the items, but you're not done until you close. And even after closing, lenders like to follow through three to five days after closing to ensure that nothing else changed in your life. And if it did, they still may come back on you and say, "Hey, you intentionally committed fraud by lying about this or changing this or doing that to get the loan." And could call the loan due and payable if they find proof that there was something that was made up or exasperated, something of that nature. So again, we're not asking you to do anything major. we're not asking you to follow up with us every minute of the day, but just think if anything affects the transaction financially, credit-wise, or bringing in income-wise. Let's talk about it. Let's see if it's fine or not fine versus assuming I can't do this or I can do this. And we see that happen a lot where people would assume something is fine and we just rather have the conversation to say yes, go ahead, move forward or no, don't. Again, I'm Brent Rasmussen, owner of Mortgage Specialists. Here each and every week to provide education and information about real estate, but mainly about the mortgage process and how it can make it simpler and easier and stress-free for you. Check us out each and every week, and we'll see you here next time. Mortgage Specialists, driven, trusted, reliable.