Buying your first house is one of the most exciting times of your life – and it should be. You’ve cut back on all of your costs to save up a down payment large enough to qualify for a mortgage. You’ve been hunting all over town for the perfect house for your family and for your budget. You’ve worked hard to keep a solid credit rating, and you have a stable employment history. However, even with all this, there are some things that you can do after you’ve gotten pre-approval and put down an offer that can torpedo your application before final approval.
Obviously, if you’re moving to accept a new job, that’s one thing. But if you aren’t moving for work, there are several things to think about before you take a new job during your mortgage application.
- Will your new employer put you on a probation period? Probationary employment is generally death for a mortgage application.
- Will your new job cause your applicable income to go down? You can’t count your bonuses, commissions or overtime until you’ve been receiving them regularly for two years.
- Is your current job driving you nuts? You can stick it out until you get through approval. It does not take more than a month or so in most cases, and shifting employment can start the process all over.
- Are you thinking about going into business for yourself? You need a two-year history (at minimum) of stable income as a contractor before you can apply for a mortgage. Stick it out where you are until you get approval for your loan.
Changing the Way You Pay your Debts
Ironically, even if you find that you can double your payment on your credit cards, don’t do it until after you’ve gotten approval. You put down a specific payment schedule on your mortgage application, and if your last month’s history differs in any way, even in your favor, that can endanger your mortgage application.
Changing Your Car
Even if you get a stellar deal, and even if your engine falls out of the car you have now, waiting to buy a new one is the best option. Buying a new car could alter your debt-to-income ratio, which is one of the golden numbers on any mortgage application. Talk to your mortgage professional before you make any decisions about a car.
Changing Payment Schedules
Keep making all of your debt payments early or on time. This includes your car note, your credit cards and anything else that might show up on a credit report. If your credit even dips a little bit because you hit a maximum limit on a credit card or you make one late payment on your car, your lender is likely to reject the application.
Securing mortgage approval can be a stressful process, particularly the waiting part. However, if you’re in between pre-approval and final approval, you’re almost there! Keep up the good work with your payments, and soon you’ll be moving into that house you’ve always wanted.