You’ve Started the Loan Process to Buy Your New Home. Here Are 3 Ways to Screw It Up

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    Adam Dahill, ranked in the top one percent of mortgage originators in the U.S. since 2014, is a loan officer at Citizens Bank. As a 16-year-veteran of the mortgage lending business in Brooklyn, he’s seen all sorts of scenarios that jeopardize the loan process for home buyers.

    Here are three of them:

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    1. Change bank accounts or transfer balances. 

    Many times young couples will consolidate bank accounts or transfer balances when buying a new home. Dahill advises waiting until closing, but if not, “by keeping good notes and records of your transactions you will get through the underwriting process much faster without added paperwork.”

    Dahill also warns against consolidating debts onto one card — you may risk increasing the balance-to-limit ratio and thus lower your credit score. Ideally, any credit cards should have no more than 30 percent balance-to-limit for optimal credit score.

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    2. Make a major purchase.

    “Don’t buy the furniture for your house until you close,” said Dahill. “The bank is going to do a soft credit check before you close and if you just bought $20,000 of stuff from Crate and Barrel, on credit, they’re going to see an inquiry, and now you don’t qualify for your loan.”

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    You might have to reduce your mortgage loan amount to account for the difference in the monthly payment. Even if it doesn’t affect your qualifications the lender will still need to document that balance and payment for the new account.

    “I’m sure that most buyers have more important things to focus on rather than scrambling for additional paperwork just before closing,” said Dahill

    3. Change your job without checking with your loan officer first.

    Nobody is telling you to not accept that dream job or better position if the opportunity presents itself. “It’s just good practice to check with your loan officer,” said Dahill. “The nuances of the new job could potentially jeopardize your loan — the start date, how you are compensated and if you are switching industries can all have an effect on your mortgage transaction.”

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    When in doubt, says Dahill, “just ask your loan officer!”

    For information on a home or refinance loan, visit Dahill’s website here.

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