Smart Start Homeowners has a expert team of  lenders to help you qualify for your primary mortgage and down payment assistance. Once you’ve applied for a mortgage to buy a home in Colorado, there are some key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when making big purchases. Here are a few things you may not realize you need to avoid after applying for your home loan.

1. Don’t Deposit Large Sums of Cash

Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don’t Make Any Large Purchases

It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgages. Resist the temptation to make any large purchases, even for furniture or appliances.

3. Don’t Co-Sign Loans for Anyone

When you co-sign for a loan, you’re accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

4. Don’t Switch Bank Accounts

Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with our expert loan officers.

5. Don’t Apply for New Credit

Whether it’s a new credit card or a new car, it doesn’t matter. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will impact your FICO score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval. They also determine your elegebility for Colorado down payment assistance programs.

6. Don’t Close Any Accounts

Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A significant component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts negatively impacts both aspects of your score.

You want your first home purchase in Colorado to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any significant life changes, be sure to consult our trusted group lenders to ensure your home loan can still be approved.

The Smart Start Homeowners team are experts with first time home buyers and all down payment assistance programs. We are with you every step of the way. Find out more now.