Things To Avoid After You Get Preapproved For A Loan

If you want to buy a house, you might initially talk to a real estate agent about this. The advice the agent gives you will probably be to visit a lender to get preapproved for a loan. Getting preapproved is an important step before you shop for a loan, but it does not ensure that you will get a loan. If your financial state or credit change after you get preapproved, you might no longer qualify for a loan. Because of this, you should avoid doing the following things after a lender preapproves you for a loan.

Allowing something negative to appear on your credit report

Anytime something negative appears on your credit report, it can drastically lower your credit score, and this is something you will want to avoid during this time. Before you get an actual loan, the lender that pre-approved you will check your credit. If your score is not at a certain level, they may deny the loan.

Buying an expensive asset

The second thing you should avoid is buying something really expensive, even if you use cash for it. If you use cash, it will decrease your savings, and this could affect your ability to get a loan. If you take a loan to buy the asset, it could change your financial picture, and this could mean that you will no longer qualify for a loan. If you want to buy a new car, for example, you should wait until after you buy a house and close on the loan.

Applying for a new credit line

Applying for new credit lines can affect your credit too. One of the effects this has is that it causes hard inquiries to appear on your credit report, and these will lower your score. Changing anything about your finances can potentially disqualify you from getting a mortgage loan to buy a house.

Quitting or switching jobs

Your income and job also play a huge role in getting preapproved for a loan and getting an actual loan. You should not quit your job after you get preapproved, as this will reduce your income, and you should also avoid switching jobs as this can affect your ability to get a loan too.

You will need to be very careful after getting preapproved so that you do not lose this status. If you would like to learn more about the preapproval process, contact a mortgage lender like Charles Swigart Home Loans.