Congratulations! You’ve gotten your mortgage approved. However, your mortgage is not guaranteed until you meet all its conditions, nor is it guaranteed until it is registered by your solicitor. Many things can happen while waiting for completion and registration date. Some of them can put your approved mortgage at risk. The following is a list I use to guide my clients after the get approved.
Avoid Changing Jobs
Your approved mortgage relies on you having a stable, full-time permanent position. Changing jobs, even if for a higher paying one, after mortgage approval, can render it void, as usually the change comes with a probation period. When purchasing a home with a completion date set for a few months ahead, lenders will ask for another, current pay stub towards the completion date. Without it, the mortgage may be compromised. Becoming self-employed after getting approved as an employee is very risky, as a self-employment income is considered only after two taxable years. Even going on maternity leave may affect your approval. All these changes need to be thought out ahead of time.
Avoid Buying a Car
Some of our clients call us immediately after they get approved to learn when they can purchase a car using the dealer finance. It’s important to know that every monthly commitment changes your eligibility for a mortgage — even after you have been approved. Taking a car lease or a car loan has the potential to ‘kill’ your already approved mortgage. Consult with us about the right amount and timeline.
Avoid Damaging Your Credit Score
Some lenders will pull a fresh credit report upon completion to confirm that your status is the same as it was upon approval. It is highly important to maintain good standing with your current credit commitments to protect your approved mortgage. Pay every credit card on time, do not miss a payment, avoid closing unused credit cards, and avoid using every card over 60% of its limit. If you need to make large purchases, such as furniture, make sure you are not taking a new loan or creating a new monthly commitment. Feel free to call us — we’ll guide you through it.
Avoid Irregular Activity with the Bank Account You Are Using for Your Down Payment
Following the Anti-Laundering Act, banks are obligated to inquire about any large deposits that come in to your account. The bank must do this, even if they have already approved your down payment and confirmed that you have the necessary amount for 90+ days. Please make sure to have records of any deposits other than the ongoing income pay, and avoid transferring money between accounts or from abroad.
Avoid Committing to Another House at the Same Time
Even If you plan to purchase more houses, do so one at a time. Let your approved mortgage complete before you move ahead with other plans. This also goes for co-signing for your family or friend’s mortgage. Both become liabilities with potential to void your approval. Don’t rush to add another debt or purchase before we calculate the right move for you and let you know how it affects you.
Avoid Staring Renovations Prior to an Appraisal
After being approved for a mortgage, the lender will send for an appraisal to confirm that the house is livable and has a right market value. Staring renovations before getting an appraisal done might risk your mortgage. Although your house’s value might go up, at the point the appraiser come it might be considered unlivable. It’s better to consult before doing any changes to the property.
Bottom line: after getting approved, keep all parameters stable and avoid making changes. Even minor changes matter. Consult with us! We’ll support you in keeping your approved mortgage.