California Home Loans: Avoid These Five Grave Mistakes To Not Risk Losing Your Approval For The Mortgage You Need

Have you been pre-approved for a home mortgage? Perhaps you’ve even received pre-approval for a super jumbo home loan — even one with loan amounts up to $15 million. Whether you’ve been pre-approved for an FHA home mortgage, a 30-year VA mortgage, or a 30-year jumbo mortgage, don’t risk your home ownership dreams by making one or more of these five mistakes that could change your qualifications:

Don’t make any major purchases

Even if you have a strong cash flow and have qualified for a super jumbo home mortgage of $5 million or more, don’t run out and buy everything you need for your dream home before your mortgage closes. Your mortgage lender has pre-approved you based on your debt-to-income ratio (DTI), cash reserves, and assets.

Don’t get any new credit cards or buy a major purchase on a credit

Could buying a new cell phone on a payment plan influence your home mortgage? Yes: any kind of change to your credit profile and score could change your underwriting criteria. Don’t respond to store offers for discounts along with a credit card.

Don’t pay off collection accounts or other charged-off amounts

Believe it or not, paying off a collection account might actually lower your credit score. Pay off your bills as you normally do, but don’t make any extra payments. If you’re in any doubt, talk to your mortgage loan professional before paying off anything that was on your credit report during the pre-approval process.

Don’t switch banks

The time to move your account from one financial institution to another is not during your home-buying process. You could be required to submit all new documentation if you change banks while you’re in the mortgage approval process.

Don’t deposit or withdraw large sums

Your bank accounts and assets are part of the mortgage approval process. If you do receive a gift toward your down payment, disclose this to your mortgage loan professional. Don’t withdraw large amounts of money during the mortgage process, either. Try to keep your bank accounts on an even, “normal” path during the mortgage approval period.

Buying a home is an exciting time, and you don’t want to risk any problems while your home is in escrow. Follow our California Home Loan tips and have a trouble-free mortgage loan approval after you’ve been pre-approved.



Learn What Mortgage Lenders Mean When They Say You’ve Been Pre-Approved Today for a Loan, Call Back Now, Don’t Delay

Is being pre-approved for a home loan the same as those credit card pre-approved offers you get in the mail? Or is it the same as actually being approved for the mortgage you need to buy the home you want?

Neither, it turns out. Mortgage pre-approval means exactly what it says: a lender is notifying you that you have preliminary approval for a specific loan amount. They’re also giving you an indication, not a guarantee, of the interest rate you could be eligible for if you continue through the loan underwriting process. A mortgage loan pre-approval means that the lender considers you qualified to borrow a certain amount of money based on the information they have at the time of your pre-approval.

You also shouldn’t confuse a California home mortgage pre-approval that you get from a specific lender based on soft credit inquiries and your stated income with letters you might get in the mail promising pre-approval or a certain loan amount. Those letters are sales tools, not real pre-approval letters.

What are the advantages of being pre-approved for a home loan?

If you’re looking for a home to buy, you can get a firm idea of the amount of mortgage you can afford based on a loan pre-approval. If you have a pre-approval letter, you know that you can narrow down the price range of homes you can afford. You won’t be shopping below your marketability to buy, and you also won’t waste time looking at properties that are out of your price range.

You can also increase your ability to make a successful offer on a house. Few things are more frustrating than finding the right house at the right price, but losing out on the opportunity because you aren’t pre-approved for a home loan. Loan pre-approval is a good step to take when shopping for a home, but there are a few drawbacks. You may be tempted to complete the home loan process with the lender who pre-approved you and not considers working with any other lender. This is one of the primary reasons it’s a great idea to work with an experienced home mortgage professional who can offer you pre-approval opportunities and give you the ability to evaluate and choose which lender and California home loan are right for you.