Four There are four major things to avoid right before applying for a loan, during the construction process or the phase of purchasing a home. Any one of these four items can greatly affect your ability to qualify for a mortgage or interim financing. Do not do any of the following until AFTER your permanent financing closes and you have moved into your new home.

1. Do not change jobs

Changing jobs during the loan or construction process can create a real problem in qualifying you for a loan, especially if that job is in a different line of work or at a lower income. It can create delays, as verification of the new job must take place. This can also be a problem if you are in the middle of building your new home because you must re-qualify for your permanent financing once the home is complete.

2. Do not switch banks or move your money around

It is best to leave your money right where it is until your loan closes. Moving your money to a new bank or even into a new account can wreak havoc with the verification process. Also, do not make any large cash deposits of gifts without discussing it with your lender. Underwriters consider this a red flag and may require documentation regarding the change.

3. Do not pay off bills

Do not pay off bills unless your loan officer advises you to do so. It may be necessary to keep the cash in your account to show as assets rather than spending it to pay off bills. If he or she recommends that you pay off bills, they will also instruct you in the best way to pay them off to ensure proper evidence needed to prove you made the bill payment.

4. Do not make major purchases

Many borrowers make the mistake of buying a new car, some furniture, or making another major purchase without realizing the impact it can have on their ability to buy a home. A large monthly payment can affect the amount of home you qualify for and the loan process itself may not be as smooth and successful as it should be. And, keep in mind, if you are building a new home, your debt to income and credit will be rechecked once the new home is complete for final approval of your permanent financing.  If you have increased your debt too much, you may not qualify.

Contact your loan officer if you feel that any of the above items are unavoidable while building or purchasing a home - even if you have already pre-qualified for a loan. He or she can help by re-qualifying you if necessary and advising you of your options. By avoiding the above four items, you can likely look forward to a successful loan closing.

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