The time between pre-approval and closing are VERY critical. Borrowers have to be very careful with their money and financial activities. It is important to keep your financial behavior as normal as possible because abnormalities will draw attention to your loan file. You do not want to engage in behavior that will derail you from your mortgage loan.
Here's a simple list of DOs and DONTs :
DO:
Report any down payment gifts you receive. You and your donor will need to sign a mortgage gift letter. Ask your loan officer about the requirements for the type of loan program you intend to use. For example, FHA rules allow gifts from a wide number of donors like relatives, churches and charitable organizations. Whereas the Conventional 97 loan program rules say donor must be related to the borrower by blood or marriage.
Stay current on your monthly debts. Getting behind now could be damaging to your credit score and most certainly to your credit history (getting "dinged" for late payments).
Keep making monthly debt payments in your normal pattern. For example, if you usually make the minimum payment on your credit card every month, keep doing that. If you pay off your credit cards every month, keep doing that as well.
Keep track of all deposits in case an underwriter requests proof about the source of funds.
DONT:
Make any big lifestyle changes such as changing or quitting your job or suddenly becoming self employed. You need 2 years of consistent income history.
Take out any new loans or co-sign for anyone.
Make any big purchases like buying a car; even an all-cash transaction could be detrimental .
Max out your credit or let payments falls behind.
Close any existing credit card accounts or open any new accounts; either activity could potentially be negative.
Omit debts and liabilities from your loan application.
Make big deposits or withdrawals without checking with your loan officers.
Change banks or open new accounts at your existing bank.
Buy furniture.
Let third parties make any credit inquiries at this time.
DO NOT SPEND MONEY SET ASIDE FOR CLOSING!!!
Happy house shopping!
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