You Are Pre-Approved: Now What?

You are pre-approved: now what? Isn’t it great to get a mortgage pre-approval? You’ll get your credit pulled by the man in a tie at your bank. You inform him of all the money you have to place down on your house. You sip coffee and discuss how you earn a clean salary, and you barely ever use your credit cards…He’s glad to print your pre-approval letter. He’ll connect you with the real estate genius, and the home hunting starts. All of a sudden your cat gets sick and you need to pay $800 to keep her alive.One week later you sell your racing bike and you are feeling great with a $1,500 deposit into your rainy day fund. Johnny from high school offers you a ring and requests that you become a partner in his new business, and you take his offer.There was an excellent deal going on at the dealership, and you bought that Bronco 4×4 you have always wanted. So, why is your mortgage guy asking for a paper trail for all of this stuff? Why has your credit score tanked? The new business is going to kill it. 

1. Do not use your credit cards past 30 percent of the available balance. It will change the scores in such a way you and the lender will not like. At times, your credit might have to be pulled again.
2. No big deposits in the bank account which cannot be sourced easily. Massive deposits will raise red flags and must be sourced.
3. Do not change jobs. Can it wait as you make one of the largest investments of your life? Income that is consistent assists in strengthening the likelihood of your file becoming approved.
4. Stop purchasing stuff. As your lender pulls your credit they’re taking into consideration all your liabilities, and taking into consideration what your income is to calculate what you are approved for. If liabilities increase, there’s an opportunity your pre-approval is going to decrease. Be certain that you ask how tight the ratios are.