Do's & Don'ts

Buying your first home is such an exciting and worthwhile process. 

As you consider your new home, you’ll want to make sure to follow these “Do’s and Don’ts” of Mortgages to make sure nothing you do negatively impacts your ability to receive a loan

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Mortgage
Do's

  • Make all rent/mortgage, loan, and credit card payments on time
  • Stay with your current employer
  • Maintain or reduce credit card balances
  • Reduce discretionary spending
  • Increase savings
  • Call me with any questions or concerns

Mortgage Don'ts

  • Make any large purchases
  • Transfer money between accounts
  • Make any deposits other than employment earnings
  • Payoff or consolidate any loans, credit cards, or collections (Talk to us first)
  • Close any open accounts, even ones that are unused
  • Change banks or bank accounts
  • Increase or max-out credit card balances
  • Apply for or take out any new loans or credit lines
  • Finance any elective procedures (medical, etc.)
  • Open or expand any new cell phone, CATV, or utility accounts

Things You Should NOT Do When Applying for a Home Loan

When you’re considering purchasing or refinancing a property there are several things you’ll want to avoid as they can have a negative impact on your loan and available financing. Keep these DON’TS in mind:

We look carefully at your debt-to-income ratio and if you have a new large payment such as a car lease or purchase, it can greatly impact those ratios and prevent you from qualifying or qualifying for the loan amount you had hoped for.

In some cases transfers from one account to another show up as new accounts and can complicate the application process. Depending on the situation you may need to disclose and document the source of funds for each new account, which just adds more items to your already full to-do list. On our end, we’re able to verify all your accounts (so no need to move things around).

A new job may involve a probationary period which must be satisfied before income from the new job can be considered for qualifying purposes. If at all possible try to stay with your current company. We realize that this is not always possible. If that’s the case, please communicate with us and we can work together to find solutions.

This item is similar to the situation of buying a new car. If the new purchase increases your debt load (at all), it can disqualify you from many of the Denver mortgage loans or deplete the funds you need to close. Try to save all “new home” purchases until after your loan closes, then go shopping!

Take this off your list and let us take care of it for you. When you run your credit it will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing later during the loan process.

We understand the temptation to try and “clean up” your financial life before you have to share it during the loan process. However, consolidating bills/debt and or making any major changes to your financial profile can adversely affect your ability to qualify for a loan. If you have questions or would like to make changes, let us know and we can advise you as to whether it needs to be done and what is the best for you and the process.

We know that moving is hectic! It’s easy for important paperwork such as W-2 forms, divorce decrees, form DD 214 (VA loans only) and tax returns to end up in boxes they shouldn’t. Make sure these items aren’t packed up with the rest of your belongings as duplicate copies can take weeks to obtain.

Just because you’re going to or have applied for a new mortgage doesn’t mean you can stop paying your current mortgage! Make sure to stay current and on-time so that it doesn’t affect your credit score mid-process.

I hope these tips help you as you prepare to buy your dream home. We want to help you prevent as many roadblocks as we can that may delay closing or jeopardize your goal of becoming a homeowner.

Cherry Creek Mortgage Co., Inc. NMLS #3001. An equal housing opportunity lender. NMLS #493951. All Rights Reserved. Some loan products may not be available in all states. Terms, rates, and fees subject to change. Please speak with one of our loan originators for more detail.