If you are looking to buy a home, you will first of all apply for a mortgage in order to finance the project. If your mortgage is approved, there is the tendency for you to think that everything is ok and some people may even apply for a new a credit and do other things that may have some negative effect on their credit score. For the fact that your mortgage does not mean that your lender will stop every other investigation on your credit. Most lenders will continue to verify and cross examine the credit rating and other details of an applicants until the mortgage paper is completely signed. So, it is important that you keep everything as it until the final mortgage paperwork is signed. Here are some the things you should avoid in order to have a smooth settlement.
Don't apply for a new credit:
There is a joy that comes with the thought of becoming a homeowner especially if you are about concluding the deal. Will like to buy all the necessary furniture or other home improvement items in order to improve the beauty of your home to your taste. This will naturally lead make you to apply for a new credit at a furniture store or home improvement store. However, as it is mentioned above, such a move can negatively affect your credit score. If a lender finds out that you apply for a new credit or that a new credit is approved to you, it is natural for the lender to think that you are likely to spend up to your new credit and thus may not be able to keep to your loan obligations.
Don't close any credit accounts
Normally, people seeking for loans do everything possible to improve their credit rating and orderly arranged their financial house. Some people go to the extent of transferring debt to a new credit account or closing unused credit account. This move may seem to be a smart one but it will cause you some points on your credit score as result of having a higher usage of debt in comparison to your overall credit availability or to your limit on a credit card.
Don't move money around without a paper trail
Before going into settlements, most lenders will require a recent bank statement. So, if there is usual deposit in the account, the lender may demand for explanation of the origin of the amount. So, to avoid this, it is advisable that you deposit all cash few weeks or months before apply for mortgage. If that is not possible, then you have to keep all documents that will serve as evidence of the origin or that explains the origin of the money ready.
Don't buy a new car
There is the tendency for you to a buy a new car as an addition to the new home's driveway. This is not a good a move and you should avoid. Such a move will reduce your savings or even affect your application for a loan. If you really new to buy a new car, you have to wait until you have moved to your new or have successfully acquired it.
Avoid touching your savings
If you touch your saving, you may not have enough cash at hand for your down payment as well as closing cost. The lender will also check the amount you have at hand to ensure that there is sufficient fund to take care of the down payment.
Don't change your job
If it is possible for to avoid changing your old, it better for you. A change of job after application have been made will definitely affect or delay your application because the lender will verify your job to ascertain your income.
The above are some of the things you should avoid before you buy a home.