beth Albanesefirst time buyerhome buyer tipsmortgage March 4, 2021

The Do’s and Don’ts When Applying for a Mortgage

So you’ve found a home you want to buy and applied for a mortgage. Congratulations! You’re probably excited to start buying things to spruce up your new place like paint, decor items, maybe even some new furniture. Is there anything wrong with getting a head start? The answer is surprisingly YES.


“Before you make any large purchases, move your money, or make any other major life changes — consult your lender!” says Beth Albanese, a sales associate at ERA Justin Realty Co. “Your financial decisions may impact your home loan.”

Here’s four key things to keep in mind.


Don’t deposit cash into your bank accounts or change bank accounts. Lenders need to source and track your assets, and cash is not easily traceable. Consistency among your accounts is key. Discuss the proper way to document your transactions with your loan officer.


Don’t make any large purchases. “Many people are excited for their move and buy new furniture or a car,” says Beth. “This is actually one of the worst things you can do. People with new debt have higher debt-to-income ratios. Higher ratios make for riskier loans, and then sometimes qualified borrowers no longer qualify.”


Don’t apply for new credit or close any credit accounts. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. “Closing an account is also problematic,” explains Beth. “A major component of your score is your length and depth of credit history. Closing accounts has a negative impact on both of those determinants of your score.” Lower credit scores can determine your interest rate and maybe even your eligibility for approval.


Do work with a trusted professional. Buying a home is one of the biggest moves you’ll make in your life. Working with an experienced, knowledgeable sales professional, such as Beth Albanese, can help you make the right decisions. To connect with Beth, or any of our experienced Real Estate Agents, call 201.939.7500.