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During the loan process, you’ll want to avoid negatively impacting your loan pre-approval in any way. Lenders look for stability and consistency, and you are responsible for maintaining your financial situation all the way through to loan closing.

Here are some simple do’s and don’ts to follow while your loan is in process:

Don’t apply for new credit. New credit inquiries can negatively impact credit scores. Depending on the elements in your current credit report, a credit score can drop as much as 15 points for a single credit inquiry.

Don’t make large purchases. This is especially true if the lender wants verification of down payment monies and closing funds. You’ll also want to avoid making large purchases on your credit cards, since this can impact your credit scores. Use credit modestly during the loan process, and avoid major credit purchases. Balances exceeding 30 percent 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. Wait until after closing to buy that new fridge or washer and dryer.

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.
Do sign up for credit monitoring. This will help you watch your credit from shopping to closing. For a small fee, the credit bureaus and other companies offer monthly 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.

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 loan pre-approval during the loan process.

If you or someone you know would like to learn more about the home loan process, please get in touch. We are happy to help!

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