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What NOT To Do When Applying for a Mortgage in Mason City IA


Congratulations on your decision to buy a home! The first step in the home buying process is getting a pre-approval and applying for a mortgage. You have been diligently saving money for your down payment and gotten your credit in order. Your loan officer has said you are in good shape to be approved for your loan. At this point you do not want to do anything to jeopardize your final approval.

Below are five things you should never do when applying for a mortgage.

1. Don’t make large deposits or withdrawals

Lenders will review six months of bank statements and any large deposits or withdrawals are red flags to loan underwriters. If you have received a gift to help with your down payment, received a bonus from your employer, or received an inheritance, talk with your loan officer about the best way to document this money.

2. Don’t make large purchases

You are probably anxious to buy furniture for your new home or spend the above-mentioned bonus money on a new car. Large purchases result in an increased debt to income ratio and additional inquiries into your credit, both of which can affect your ability to close on your loan. In addition, don’t co-sign on a loan for another person increasing your debt to income ratio.

3. Don’t close credit card accounts

One would think closing credit cards that you do not use is a good idea, but nothing is farther from the truth. Lenders look at how much credit you have available and how long you have had it along with your payment history. Reducing your available credit can change your debt to income ratio causing problems in the eyes of your lender.

4. Don’t change jobs

Income stability is the primary factor in being approved for a mortgage. It is best to put off changing jobs until after your close on your loan. If you must change jobs, be sure your new job is in the same industry as your current one.

5. Don’t change bank accounts

Lenders confirm the source of funds and track your assets. This is easier to do if you have some consistency in your bank accounts.

Seemingly minor changes in your financial history when applying for a mortgage can create unintended consequences. Be sure to talk with your lender before making changes that may affect your ability to buy your dream home.

Again, congratulations on your decision to buy a home.  Jane Fischer & Associates are here to help you through every step of the home buying process. Give them a call today, 641-424-HOME (4663) or visit

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