Home Buyer 10 Commandments

🚫 What Not to Do When Applying for a Mortgage — and Why It Matters

When you're in the process of buying a home, your financial stability is under the microscope. As your loan officer, my job is to help you secure approval smoothly—and that means avoiding certain financial moves that can jeopardize your loan. Here’s why these are red flags for lenders:

• No Changes to Employment

Lenders verify your employment multiple times during the loan process. Changing jobs—especially switching industries or going from salaried to self-employed—can delay or derail your approval.

• Don’t Buy a Car (or Any Big-Ticket Items)

A new car loan increases your debt and affects your debt-to-income ratio (DTI), which is a major factor in qualifying. Even a zero-interest offer can impact your credit and loan eligibility.

• Don’t Spend Your Closing Funds

The money you’ve set aside for closing must stay intact. If your account balance drops unexpectedly, the lender may see this as a risk and require updated documentation—or deny the loan.

• Avoid Excessive Use of Credit Cards

Running up your balances can lower your credit score and increase your DTI. Even if you pay it off later, it may cause issues during the lender’s final credit check.

• No Furniture or Appliances on Credit

It’s tempting to furnish your new home, but buying items on credit before closing adds debt and can change your approval status. Wait until after closing.

• Don’t Co-Sign Loans for Anyone

When you co-sign, you’re taking on someone else’s debt—at least in the lender’s eyes. This can increase your financial obligations and affect your mortgage approval.

• No Changing Banks or Moving Money Around

Lenders track your funds to ensure they're from acceptable sources. Changing banks or large transfers complicate the paper trail and can delay underwriting.

• Don’t Omit Debts from Your Loan Application

Always disclose all your debts. Lenders will find them anyway through your credit report, and omissions can create trust issues or lead to loan denial.

• No Large, Unverified Deposits

Any big deposit that can’t be sourced (like cash from a friend) raises red flags. Lenders need to know where your funds come from—especially when it comes to gift money or outside help.

• No New Credit Card Inquiries or Accounts

Every inquiry impacts your credit score and can suggest financial instability. Opening new credit lines also alters your DTI and can trigger a re-evaluation of your loan terms.

Stability and transparency are key. If you're unsure whether something could affect your mortgage, always ask your loan officer before making a move.

📩 Need guidance on your home financing options? Let’s discuss your best path forward!

Christel Renaud | Christel Miami Luxury Living

912-484-0498 | [email protected]