Finding your dream home is a huge milestone and it’s worth celebrating! In the high-stakes, fast-moving Bay Area real estate market little missteps can have big consequences. Once you’ve applied for your mortgage, here are a few things you should avoid to keep your approval on track:
1. Avoid Depositing Large Sums of Cash
Lenders need to verify where every dollar is coming from. Large cash deposits can delay or even derail your loan. If you’re getting a financial gift or reimbursed funds, check with your loan officer about the right way to document it.
2. Don’t Change Bank Accounts
Switching banks mid-process might seem harmless, but it complicates the paper trail lenders need. In a fast-paced market like the Bay Area, where timing is everything, unnecessary account changes can slow you down and cause last-minute issues.
3. Hold Off on Big Purchases
It can be tempting to start shopping for furniture and decorations right away, but these expenses can add up fast. Big-ticket items can throw off your debt-to-income ratio, making your loan appear riskier to lenders. Even if you were previously pre-approved, a change in your financial profile could impact your qualification status.
4. Avoid Job Changes or Payment Structure Changes
The Bay Area is full of tech talent and startups, which means people often shift roles or go from salaried to freelance or contract work. While that might make sense for your career, it’s best to wait until after you close on your property. Stability is key in the eyes of a lender.
5. Don’t Co-Sign on Loans
Helping a friend or family member is admirable, but becoming a co-signer adds their debt to your financial profile. Even if you’re not the one making payments, it could affect your loan eligibility. Hold off until you have officially closed.
6. Don’t Open New Credit Accounts
Every credit inquiry can affect your score, which plays a big role in your mortgage rate and approval status. It’s best to save any new credit applications for after you close.
7. Don’t Close Existing Credit Accounts
It may seem smart to close unused credit cards, but this can actually hurt your credit score. Keeping those accounts open helps maintain a longer credit history and a healthier credit utilization ratio — two things lenders like to see.
8. Pay All Bills on Time
Sounds obvious, right? But when you’re juggling inspections, appraisals and moving plans, it’s easy to let something slip. Just one missed payment can lower your credit score enough to impact your approval. Set reminders or automate payments to stay on top of things.
Ready to Buy in the Bay Area? Keep Things Steady
Buying a home in the Bay Area is a huge and exciting step! Once your mortgage application is in, the best thing you can do is keep your finances steady and stay in close contact with your lender. A little consistency goes a long way.
With how competitive the local market can be, making sure everything stays on track behind the scenes can help you move smoothly toward closing day. Avoiding sudden changes to your financial picture helps your lender keep the process moving without surprises.
