When going through the lending process, you should avoid these 7 mistakes.


2023 is upon us! We are so excited for the future and can't wait to serve you. As we prepare for the year, we’re here to talk about the seven things not to do during the lending process. When you’re in the process of buying a home, you should talk to your lender before considering any of these things: 

1. Do not make a large deposit. As a rule of thumb, a large deposit is considered something over 1% of the purchase price or over 50% of your monthly income. If the deposit is larger than either of those two amounts, do not make it without consulting a lender first. 

2. Do not make a large purchase. This could include a new vehicle or appliances for the home. Any large purchase that you make on credit or with a large sum from your bank account can be a red flag to underwriting. 

3. Do not cosign a loan. I can see why someone may want to cosign for a loved one, especially if urgent needs arise. However, don’t cosign without checking with your lender first. 

4. Do not switch bank accounts. A lender will request bank account statements through the time that you apply for the loan. Many times, there needs to be an update to that account throughout the process. If you switch accounts and the lender requests an update, it may be difficult to track down. Oftentimes clients will have to drive to the bank, visit with the teller, and get the teller to sign off to satisfy the lender's requirement, which is an unnecessary headache. 


Your lender can tell you which things won’t hurt your buying process.


5. Do not open up new credit. Whether you're at a department store or with an airline, do not consider doing this. New credit often lowers your credit score because it's a brand-new account with no history, which isn’t favorable. 

6. Do not close any accounts. Existing accounts contribute significantly to your overall credit score. You have a history on your existing account showing on-time payments every single month. As soon as you close it, all of that positive history gets shut down. If that happens, it is very common to see someone's credit score drop by five to 20 points. 

7. Do not change jobs. Nine out of 10 times it's going to be okay, but it's that one time we need to be careful of. Maybe there's something special with your income or the way underwriting has calculated it. If you are considering changing jobs for whatever reason, you must consult with your lender first. 

Those are the seven things you should avoid. All of them are fairly simple—you just need to check with your lender first. If you need assistance with these issues, contact us, as we would love to help! You can call (480) 358-7801. Reach out any time.