Getting pre-approved for a mortgage is a smart move, as it can help you know what you can afford and put you in a better negotiating position with home sellers. However, a pre-approval does not guarantee that you will be able to get a mortgage. That is especially true if you do something to sabotage your mortgage pre-approval. Here are three ways to make sure that doesn't happen.
Don't Hurt Your Credit Score
Your credit score is one of the most important factors lenders use in determining whether to grant you a mortgage and what type of interest rate you get. Your pre-approval will be based on your credit score at the time, but when you actually apply for a mortgage, the lender will look at your credit score again. If it has dropped significantly, it can affect your mortgage prospects. While going through the mortgage process, make sure to pay all your bills on time and don't run up a lot of debt.
Don't Make Big Purchases
A good way to sabotage your mortgage pre-approval is to make big purchases before closing on your house. This is especially true if you are using credit cards or taking out loans to pay for them. If you are planning to have a few nice toys to go along with your new home, it is a good idea to wait until after you have moved in to buy them. If you have a question about a potential purchase, talk to your Century 21 Town & Country agent.
Don't Change Jobs
You might think moving to a new home is a perfect time to change jobs, but your lender doesn't see it that way. Lenders crave stability, and they would much rather see that you have been at a job for several years rather than a few months, even if the new job pays more. If you are moving to a different city for a new job, then you may not be able to avoid this. But if you are simply moving across town, try to postpone the job move until after you have moved into your new home.
Getting a mortgage is a complicated a process, and while a pre-approval is a good idea, it's nothing more than a general recommendation. Nothing is for real until you sign on the dotted line. Even after you have signed the mortgage papers, it's a good idea to avoid any of the things mentioned here until after you have closed on your home purchase and moved into your new home.