Source: https://www.moneycrashers.com/
Getting a home loan approval is only the beginning of the home buying process. Sometimes there is a tendency for homebuyers to think it’s a done deal. This is a mistake because an initial approval doesn’t mean problems cannot arise down the road. Below are seven tips that can help you through the next steps after your home loan has been approved.
1. Don’t Apply for New Credit
After your home loan is approved, there is a lot that must happen before the entire process is complete. Towards the end, lenders will run another credit check to finalize the loan. If you apply for a new line of credit between the time the first and second credit checks were run, the lender can void the loan approval. However, it may not be a problem if the application only resulted in an inquiry for credit that was not granted. It’s best if there isn’t even an inquiry. Unfortunately, an inquiry can lower your credit score, which can also have an impact on the status of your home loan.
2. Avoid Making Big Purchases
Whey buying a home, you’ll want to avoid making any big purchases until everything with your home loan has been settled. There’s a tendency to want to buy furniture and other items once the home loan has been approved. However, that’s something that should wait until you have completed the entire purchase process. If you don’t wait, there’s a chance that it could affect your debt-to-income ratio, which could delay the loan closing.
3. Don’t Pay Bills Late
One of the reasons why you may have been approved for the loan in the first place is because you have a high credit score for paying your bills on time. It’s important that you continue to do so to avoid any issues when the second credit report is run. In other words, you should continue to pay your bills the same way you did to get the initial approval.
4. Learn About Home Ownership
If this is the first time you’ve purchased a home, there’s a lot that you need to learn about home ownership. Getting a home loan is the beginning of many other responsibilities. You’ll want to make sure you find the right property and avoid making any of the common mistakes made by homebuyers. A good place to get an overview of what you should consider is with a No1 Property Guide Bendigo. You can get expert tips on what should happen after your home loan is approved.
5. Don’t Co-Sign For Anything
Co-signing a loan is something that most people don’t realize makes them responsible for the loan if it isn’t paid by the primary signer. As a co-signer, lenders will hold you responsible for the loan, which means it will show up on your credit report. If this happens during the lending process, it can hinder your ability to finalize a home loan. Even if a co-signed loan is paid on time by the primary signer, the lender will add the loan to your debt-to-income ratio.
6. Keep the Same Job
Changing jobs after you have been approved for a home loan will create a problem towards the end of the process. It’s important that you maintain the job that you have until you have completed the entire process and not just the approval phase. Part of the process involves providing paystubs to verify your salary. If your source of income changes, you will likely need to start over.
7. Respond Promptly to Lender Requests
There are many different documents required during the process of applying for a home loan. It’s important that you respond quickly to lender requests to ensure the process goes smoothly. Fortunately, many lenders now accept documents that are provided electronically. If there are documents that you are unable to provide, you’ll need to communicate with the lender and make any necessary arrangements to provide alternative documentation.
After your home loan is approved, you’ll need to maintain the same due diligence that got you the approval.
