Mortgage Maze: Your Essential Do's and Don'ts

Navigating the Mortgage Maze: Your Essential Do's and Don'ts

Securing a mortgage can be a thrilling step towards homeownership or refinancing your current home. However, it's a process that requires careful navigation. One wrong move, and you could jeopardize your chances of approval or end up with less favorable terms. This guide will walk you through the crucial do's and don'ts to keep your mortgage application on track.

The Golden Rule: Stability is Key

Once you've started the mortgage process, whether buying a new home or refinancing, it's vital to maintain financial stability. Avoid any actions that could negatively impact your loan approval. It might be tempting to start furnishing your dream home or renovate your current one, but it's crucial to keep your financial situation consistent until the loan closes. When in doubt, always consult your lender before making any financial changes. Even seemingly beneficial moves can backfire, costing you money or even your loan approval.

The Don'ts: Actions to Avoid

• Don't Apply for New Credit: Resist the urge to apply for new credit lines, even if you receive enticing offers. New credit inquiries can lower your credit score. This also means avoiding new credit for furniture, appliances, or other purchases.

• Don't Pay Off Collections (Unless Advised): Unless your lender specifically instructs you to, avoid paying off old collections during the mortgage process. Surprisingly, this can sometimes lower your credit score.

• Don't Max Out Credit Cards: Keep your credit card balances low. Running up your credit cards can significantly and rapidly decrease your credit score—potentially by up to 100 points! Aim to keep your credit card balances below 30% of your available limit during the loan process.

• Don't Consolidate Debt: Avoid consolidating debt onto one or two cards. Changing your debt-to-available credit ratio can negatively affect your credit profile. It's also important to maintain a positive credit history.

• Don't Close Credit Card Accounts: Closing credit card accounts can also impact your debt-to-available credit ratio, which accounts for a significant portion of your credit score. If you're set on closing an account, it's best to wait until after your mortgage loan is finalized.

• Don't Raise Red Flags to the Underwriter: Avoid co-signing on loans for others or making changes to your name or address. Less financial activity during the loan process is generally better.

• Don't Make Adjustments to Your Assets: Refrain from changing investments, moving funds, closing or opening accounts, or making substantial changes to your assets without consulting your lender.

• Don't Make Large, Unexplained Deposits: Large deposits into your bank account that are inconsistent with your past history may raise questions from the underwriter unless they are documented gifts.

• Don't Change Employment or Income: Job stability is a critical factor in the mortgage underwriting process. Avoid quitting, changing jobs, or even changing positions within the same company, as this can jeopardize your loan approval. Immediately inform your lender of any employment or income changes.

• Don't Overdraw Your Bank Account: While it may seem obvious, overdrawing your bank account or bouncing checks can lead to loan denial. Lenders review your checking account activity, so maintain careful oversight during the mortgage process.

The Do's: Positive Actions to Take

• Do Stay Current on Existing Accounts: Ensure you make timely payments on your current mortgage, car loans, and all other accounts. Late payments can significantly harm your credit score. If a payment is scheduled within two weeks of closing, consult your lender.

• Do Continue Normal Credit Use: Maintain your regular spending habits. Deviating from your typical spending patterns can raise red flags and potentially lower your credit score. Postpone any changes to recurring services until after your loan is funded.

• Do Call Your Loan Consultant: Don't hesitate to reach out to your loan consultant with any questions during the mortgage process. They are there to guide you.

If you need to speak to a qualified professional mortgage loan officer who can help you plan accordingly to prepare for a home purchase, I have several very qualified Professionals in my network who would be happy to assist you with making the right decisions for your mortgage planning process.

Here are some great lenders below who can help you:

Thea Simloari, Movement Mortgage

Harry Brousaides, NorthStar Mortgage

Mike Kidwell, Leader Bank

Glen Cira, Leader Bank

Savvas Fetfatsidis, Guaranteed Rate
 

In Conclusion

Navigating the mortgage process requires diligence and a clear understanding of what to do and what to avoid. By following these guidelines and maintaining open communication with your lender, you can increase your chances of a smooth and successful mortgage experience.

Michael Mahoney
617-615-9435
mike@mmahoney.com
www.RealtorMikeMahoney.com

MA. License #9051300
Real Broker LLC License #423031

☎️ 📆 Schedule a Call with Mike Now

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I am Michael Mahoney, a full time Realtor in Greater Boston focused on Norfolk & Suffolk Counties. I have been helping people fulfill the “American Dream” through home ownership, real estate wealth building, and real estate investment for over 2 decades.

My goal is to help people “go from the life they have to the life they dream about” using real estate as means to build wealth and financial security. If you want to make a change, I help people go from the “what if” to the “what is”.

I work in all price points. The majority of my business is repeat clients and the referral of clients from all over Eastern Massachusetts.

I view my role as the advisor who helps people go from the life they have to the life they dream about. I help people go from the “what if” to the “what is”

I have sold everything from mobile homes to amazing estates. I have sold hundreds of homes, multi families and condos in almost every town in Suffolk and Norfolk County. I also sell homes in Plymouth, Bristol and Middlesex Counties. When asked what my specialty is, I often joke and say “from section eights to great estates”.

There is no property too small or too large in the residential space that I would shy away from.

All of my personal sales and marketing endeavors are supported by top-of-the-line personal market research completed carefully with expertise in order to create strategically targeted marketing collateral and campaigns for clients. I personally have a stand by commitment of 7-days a week for my clients. I aim to cultivate my own reputation for quality, professionalism and your results.

From selling hundreds of homes in Greater Boston comes experience and situational awareness that can only be developed over time which is a tremendous value to clients.

Some of my service areas include:

Service of My Service Areas Include:

Ashland Attleboro Avon Bellingham Boston Braintree Brockton Canton
Dedham Dorchester Dover Foxboro Framingham Franklin Holbrook
Holliston Hopedale  Hyde Park Mattapan Medfield Medway
Milford Millis Milton Natick Norfolk North Attleboro  Norwood Plainville 
Quincy Randolph Roslindale Sharon Sherborn Stoughton Walpole Wellesley
West Roxbury Westwood Weymouth Wrentham