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3 Nov

Be Cautious Until Your Mortgage Funds


Posted by: Patricia Kirkham

With new mortgage rules coming into play more frequently these days, which often make it more challenging to qualify for the desired mortgage amount to fund your dream home, it’s important to be careful what you do between the time your mortgage is approved and when it funds.

It’s not uncommon for lenders to pull new credit bureaus prior to funding, especially if there’s a long wait between the time of approval and when your mortgage is actually set to find.

Here are five important things to keep top-of-mind between your mortgage approval and funding dates:

  1. Don’t buy a new car/increase your lease payments. This can negatively impact your debt ratios. Just wait until after your funding date.
  2. Don’t buy furniture on the ‘Do not pay for XX years plan’ until after funding. Even though you don’t have to pay upfront, this type of purchase will still be reported on your credit bureau, and will become an issue – especially if your approval was tight.
  3. Don’t quit your job or change jobs. Even if it’s a better-paying job, you’re still likely to be on probation. Don’t change industries, decide to become self-employed or accept a contract position even if it’s within the same industry. Delay the start of your new job, self-employment or contract status until after your funding date.
  4. Don’t transfer large sums of money or deposit a lot of cash. Lenders get especially uneasy about this type of bank account activity because it looks like you’re borrowing money. Be prepared to document all money transfers and cash deposits.
  5. Don’t forget to pay your bills, even ones that you’re disputing. This can be a real deal-breaker. If the lender pulls your credit bureau prior to closing and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they’ll fund. Still, you don’t want to have to scramble to pay off debt at the last minute.

While you may not risk losing your mortgage approval because you have broken one of these rules, it’s always best to talk to your mortgage professional before doing any of the above just to be sure.

Do you have questions about additional cautions to take before funding or about your mortgage in general? Answers are just a call or email away!