Buying a new house or refinancing your current residence is an exciting time in life. It can be easy to get carried away and want to make other large financial decisions or changes at the same time, while you’re in the zone. However, the last thing you want is something disrupting your original plan. At Fairway Independent Mortgage Corporation Fort Lauderdale, we’re here to make you aware of potential difficulties in the mortgage process that can be easily avoided.

Changing Occupations

During the loan process, an important step for the underwriter is obtaining a VOE, or Verification of Employment. When filling out an application for a mortgage, you list the basic information about your job. This includes job title, company information and length of employment. The underwriter will reach out to your employer to verify this information, and if a discrepancy exists, it could interfere with your mortgage process.

While changing jobs won’t necessarily disqualify you from obtaining a mortgage, it will lengthen the process with more required paperwork and verification.

Adding Large Purchases to Credit

Loan officers take a look at DTI, or debt-to-income ratio, to determine the loan amount for which you qualify. If your DTI changes because of additional purchases, it could negatively affect your final approval for the loan during the underwriting process. Since credit utilization is an important aspect of loan approval, changes to your credit lines after submission can be considered a red flag, especially if the change is a large increase in balance. Once your loan paperwork has been submitted for approval, including the statements from your open accounts, it is best practice to avoid additional purchases until your mortgage process is complete.

Opening New Lines of Credit

While you may think an additional line of credit could improve your credit score by increasing your credit limit, you must also consider the effect of an additional hard pull on your credit report. A new account may not disqualify you from your mortgage loan, but it is best to avoid the risk altogether, if possible. This applies to store credit cards as well. While a 10% discount on your purchase may sound tempting, it could do more harm to your loan file in the long run.

The loan officers at Fairway Fort Lauderdale are knowledgeable of myriad financial situations and happy to walk you through the process with exceptional advice. Give us a call today to get started!