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Applying for a mortgage: dos and don'ts

Between the time when you decide to buy a house and you take ownership, it is crucial that your financial circumstances don't change drastically or there may be delays with the closing. Keep the process as smooth as possible by following these guidelines.

  • Do show stability – Keep your job, don't change banks, don't move. If ever you want to maintain the status quo, now is the time. Report any unexpected changes to your loan representative as soon as possible.
  • Do tell the truth – It may seem unnecessary to be reminded of this, but be as thorough as possible on the loan application. An in-depth analysis of your history will take place during the loan process. Failing to report a debt or misrepresenting your income will raise red flags.
  • Do maintain your credit rating – Make on-time payments and don't charge excessively.
  • Do save some cash for closing costs and homeownership – New homeowners buy more products and services in the first six months after moving in than established residents spend in two years, according to Experian.
  • Don't open new credit accounts – Depending on your credit rating, this may not pose a big risk in the process, but it's smart to hold off on anything that may include a credit inquiry unrelated to your mortgage at this time.
  • Don't finance a new vehicle – A car loan increases your debt-to-income ratio (see definition below). Ditto on buying new furniture or other big-ticket items on credit.
  • Don't co-sign a loan – Even if you're helping a responsible family member, the debt will appear in your name and may affect both your credit rating and your debt-to-income ratio.
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Mortgage Basics

Watch a short video (3.5 min.) on how our mortgage process works.