Do's and Don'ts During the Home Loan Process


While each lender has its own guidelines to follow, these do's and don'ts are applicable at most any lender you choose to work with for your home loan.

Each lender has different credit guidelines to follow. Some lenders are required to order a credit report initially during loan pre-qualification but also a second time prior to loan closing, which is why it is crucial to avoid certain credit behaviors during a loan process. The following tips are examples of some key credit behaviors.

DO SIGN UP FOR CREDIT MONITORING so that you can watch your credit from shopping to closing. For a small fee, usually less than $15 per month, many companies even the CRAs themselves offer monthly credit monitoring services to inform you of any new credit activity that may impact your scores. Credit monitoring is especially helpful to detect the first signs of identity theft.

DO PAY BILLS ON TIME. Stay current on existing accounts and avoid any late bill payments.

DON'T APPLY FOR NEW CREDIT. New credit inquiries can negatively impact credit scores. Depending on the elements in your current in your current credit report, a credit score can drop as much as 15 points for a single credit inquiry.

DON'T MAX OUT YOUR CREDIT CARDS. Use credit modestly during the loan process, and avoid major credit purchases. Balances exceeding 30% of the total available credit line can bring credit scores down. This includes transferring debt from one card to another, which will impact the total available credit per card.

DON'T CLOSE CREDIT ACCOUNTS. Closing a credit card will adjust the total amount of available credit, which will impact credit scores. Also, closing a card may impact other factors to your score such as the length of your credit history.

FINALLY, DO STAY IN TOUCH WITH YOUR LOAN AND REAL ESTATE PROFESSIONALS. Consult your mortgage or real estate professional with questions about whether a specific action can affect your credit reports or scores during the loan process.

If you have any questions or would like to get started on your home loan, contact Popish Mortgage Group today!

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