So, if you're gearing up to buy a home, I know it's tempting to start picturing yourself settled in and decorating the place. Trust me, I get it. But before you get carried away, there are some important things to consider after you apply for your mortgage and before everything's final. Here's a rundown of key points to keep in mind while you're in the process of applying for your home loan.

Don’t Deposit Large Sums of Cash

When dealing with lenders, they like to know where your money is coming from. Cash can be a bit tricky to trace, you know? So, before you go depositing any cash into your accounts, it's a good idea to have a chat with your loan officer about how to document your transactions properly.

Don’t Make Any Large Purchases

It's not only the purchases related to your home that might make you ineligible for a loan. Any big buys can make lenders wary. When you take on new debt, your debt-to-income ratio goes up (that's how much debt you have compared to what you earn each month). Higher ratios mean riskier loans, and that could mean you don't qualify for your mortgage anymore. So, try to hold off on making any major purchases, like furniture or appliances, even if it's tempting!

Don’t Cosign Loans for Anyone

Hey, when you cosign for a loan, you're basically saying you'll take responsibility if the borrower can't pay. This means your debt-to-income ratio could go up, even if you don't plan on making the payments. Just something to keep in mind!

Don’t Switch Bank Accounts

When lenders are checking out your financial situation, it really helps if your assets are all in order and consistent across your accounts. So, before you go moving any money around, it's a good idea to have a chat with your loan officer.

Don’t Apply for New Credit

Whether you're getting a new credit card or a new car, if different financial organizations (like mortgage companies, credit card companies, car loan providers, etc.) check your credit report, it can affect your FICO® score. And if your credit score drops, it might affect the interest rate you're offered and could even impact whether you get approved for the loan.

Don’t Close Any Accounts

A lot of folks think that having less credit available makes them seem less risky to lenders and more likely to get approved for a loan. But that's actually not the case. One big factor that affects your credit score is how long you've been using credit and the variety of credit you have, not just whether you pay on time. Another important factor is how much of your available credit you're using. Closing accounts can hurt both of these aspects of your credit score.

Do Discuss Changes with Your Lender

Hey, when you're chatting with your lender, make sure to be open about any changes happening or about to happen. If your income, assets, or credit hit a snag, go through it with your lender and figure out a plan to still get your home loan approved. Also, if you've had any recent changes in your job or employment status, let your lender know about that too. Basically, it's important to lay it all out and talk through your plans with your loan officer before making any big financial moves.

Bottom Line

When it comes to buying a home, you want everything to go smoothly, right? So, before you go making any big purchases, shuffling your money around, or making any major life changes, make sure to chat with your lender. They're the experts who can fill you in on how your financial choices might affect your home loan.