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How to Get Your Mortgage Approved (and Keep It That Way)

Think you can finally relax after submitting your mortgage application? Don’t be so sure. 

A lender will continue evaluating your financial situation until closing day, and certain changes could cause them to deny your application. You can help prevent this from happening by knowing what not to do during the mortgage approval process.

Why You Might Lose Your Mortgage Approval

Mortgage approval doesn’t happen overnight. In fact, the normal time frame is 30 days in a typical home loan market. 

However, the more complicated your loan, the longer the approval process could be.

For example, with some lenders, closing could take as long as two months in the middle of a refinance boom because banks can’t keep up. That number could jump to six months for real estate owned (REO) and distressed sales.

During this time, your circumstances could change in ways that affect your mortgage approval: You could lose your job or have your property damaged by a natural disaster or storm. Any of these events could cause your lender to revoke your mortgage approval, even if they had previously cleared your loan to close.

All of these events are outside your control, which makes it even more important to pay attention to what you can control during the time between your loan application date and your funding date. While you can’t control the weather, you can control your own behaviors and avoid doing anything that could compromise your mortgage approval.

[Related: Mortgage Options With No (or Low) Down Payments]

Bad Mortgage Behaviors to Avoid

Any of the following behaviors could sabotage your mortgage approval. Be sure not to:

  • Quit your job to start at a new company or change industries.
  • Change from a salaried job to a job that relies heavily on commission.
  • Open a new credit card.
  • Forget to pay your bills (even if they’re in dispute).
  • Purchase a new vehicle or trade up to a larger lease.
  • Deposit random amounts into your bank account without documenting them.
  • Transfer large amounts between bank accounts.
  • Accept a cash down payment gift without completing the proper paperwork.

You may not be able to avoid engaging in some of these behaviors: For example, if your car lease is going to expire, you’ll have to renew it. 

However, you may be able to minimize the impact of certain actions. If you have to renew your car lease, you could improve your debt-to-income ratio by spreading the lease over more months. Likewise, if you’re accepting a cash gift for your down payment, you’ll want to follow all of the proper procedures.

Be sure to consult your loan officer anytime you need to engage in the above actions so they can help you reduce the impact to your mortgage approval.

[Related: How to Choose the Right Mortgage Broker]

When Unsure, Ask Your Mortgage Broker

The best way to ensure that your mortgage gets approved is to work with a mortgage broker who can help you along the way.

Seattle Mortgage Planners is happy to discuss additional actions to avoid during the mortgage approval process. If you can’t avoid one or some of these, we can also review your options to minimize the impact to your mortgage approval. Our goal is your goal: to get your mortgage approved as quickly and hassle-free as possible.

Schedule a consultation with us today to get started!

Featured image via Pixabay

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