As a Realtor, when I meet with a buyer client for the first time, we discuss what they need to do – get pre-approved for a mortgage, evaluate priorities, sometimes save money. These are all the positive things that a buyer can do. This is a useful discussion,whether you are buying your first condo in Logan Circle, looking at a townhouse for sale in Kenwood Forest, or searching for your luxury home in Edgemoor.
And with many buyers purchasing short sales (sometimes a long” process), there’s enough time that buyers’ financial situation can change dramatically from the time of pre-approval to the time of final underwriting. It helps to remember this list of things Not to do!
Here are the 10 commandments for getting a mortgage:
- Don’t buy or lease a new car or you may find yourself living in it
- Don’t quit your job to change industries or start a new company
- Don’t switch from a salaried job to a heavily-commissioned job or 1099 independent contractor position
- Don’t transfer large sums of money between bank accounts. If you need to do so, check with your loan officer to ensure what kind of documentation will be required BEFORE you make the transfer
- Don’t forget to pay your bills — even the ones in dispute
- Don’t open new credit cards — even if you’re getting 20% off. (And yes the offers at some of the department stores are tempting but resist the temptation!)
- Don’t make big purchases on the existing credit cards. The time to buy the new furniture and appliances on credit is AFTER you own the home, not before
- Don’t close any credit card accounts. This may change your ratios, which help determine how much mortgage you qualify for. Even though this seems like a good idea – it isn’t. Trust me!
- Don’t accept a cash gift without filing the proper “gift” paperwork. Ask your lender what documentation is required.
- Don’t make random, undocumented deposits into your bank account
If circumstances dictate that you might need to engage in some of these behaviors, always talk to your loan officer first. And then follow their advice. If you need a referral to a good loan officer who can help you through the process, we at the Lise Howe Group will be happy to provide one. I work with lenders at Chase, Sun Trust, BB&T, Apex, Wells Fargo, and others.