Does this situation sound familiar? You’ve found your forever home. You’ve been approved and completed all your mortgage paperwork. You think you’re done and now you want to buy a whole bunch of furniture for the new abode. Perhaps you’ve been eyeing a new car or even a new job at the same time. It seems pretty reasonable to make a life change or purchase, after all, you’ve been approved. What could go wrong, you ask? You could sink your mortgage faster than a leaky boat.
People mistakenly believe once they’ve been pre-approved or approved by a lender it’s all done. But they don’t realize that a lender may pull their credit 30 days prior to close. They also don’t realize lenders can request updated documents in that time.
And if some of the original information that got you the mortgage approval in the first places changes – and for the worse – you could lose your financing.
Here’s a short list of changes that could kill your mortgage.
Don’t Have Your Credit Pulled By Anpther Broker or Lender
The lender will often pull your credit again right before financing. If the lender sees that other brokers or lenders have pulled your credit the lender views this a credit seeking and can put your funding in jeopardy.
Don’t Apply For New Credit
The lender calculates your debt based on the amount of credit you have. If you are applying for new credit, the obvious assumption is that you are planning on using it. Don’t get any new credit until the closing date is passed.
Don’t Close Any Old Credit Accounts
Credit is not a bad thing – unless you are having a hard time managing it. Old credit shows a long history of being able to handle credit. Lenders like that.
Don’t Move Your Money Around Without A Paper Trail
When you settle with the bank on the contract of the mortgage, the lender will require bank statements showing your saved money. They look at the history along with the balance. If there are any unusual deposits, you will need to explain where the money comes from. Be prepared to show a paper trail.
Don’t Increase Your Debts
The lender always looks at your debt to income ratio. If you increase your debt, you can risk going over the maximum amount of debt compared to your income.
A good mortgage broker will remind you of the pitfalls that can happen if you change your financial situation before closing, but ultimately it’s in your hands. You have to take responsibility and use common sense when they’re in the closing process.
Source: Homeservice Club of Canada