Applying for a mortgage is one of the most exciting steps in the journey toward building a new home, and a little preparation goes a long way in keeping everything on track. The goal is to present the strongest financial picture possible from start to finish. Here are some of the most common things to be mindful of along the way.
Keep credit activity on hold.
This is a great time to hold off on opening new credit cards, taking out loans, purchasing new furniture or a vehicle, or co-signing for someone else. Any new credit activity can affect the debt-to-income ratio and raise questions during the approval process, so keeping things steady is the way to go.
Stay the course with employment.
Lenders love to see stable, consistent income and staying in the same position during the mortgage process helps paint that picture. If an employment change is truly unavoidable, reaching out to the loan officer right away is the best move. The sooner they know, the better they can help work through it together.
Keep account activity clean.
Insufficient funds checks are something to avoid at any time, and especially during a mortgage review. Large or unexplained withdrawals can also raise questions, so it’s best to keep those to a minimum and replenish funds as quickly as possible if a withdrawal does become necessary.
Be transparent with deposits.
Every deposit made during the process should be easy to trace back to a clear and reasonable source. Unexplained deposits can sometimes trigger additional questions and slow things down, so keeping good records is really helpful here.
Leave credit limits alone.
Whether it’s an increase or a decrease, changes to credit card limits during this time can shift the credit profile in unexpected ways. Keeping everything as consistent as possible right up until closing day is the simplest and smartest approach.
Staying mindful of these things makes for a much smoother and more enjoyable road to the closing table. For more on what to expect from start to finish, visit the Home Building Process page to learn more about building with Watts Homes & Construction.