Getting preapproved is an important step when buying a home in Charlotte, but it does not guarantee final mortgage approval. Lenders may verify your credit, employment, income, assets and debts again before closing.
Protect your financing by avoiding these common mistakes and communicating with your loan officer whenever something changes.
Protect Your Budget and Credit
1. Do Not Treat Your Preapproval as Your Budget
A lender may preapprove you for more than you are comfortable spending. Build a personal budget that includes property taxes, homeowners insurance, HOA dues, utilities, maintenance and emergency savings.
2. Do Not Let Emotion Override Your Plan
Excitement can lead buyers to exceed their budget or overlook important property concerns. Decide your maximum price and acceptable repair level before submitting an offer.
3. Do Not Apply for New Credit
A new credit card or personal loan can create a credit inquiry and additional debt. Either change could affect your mortgage qualification or loan terms.
4. Do Not Finance a Car, Furniture or Appliances
Wait until the home purchase has officially closed before financing major items unless your lender advises otherwise. Even a promotional financing offer creates a new account that may affect underwriting.
5. Do Not Miss Payments or Increase Credit Balances
Continue paying every account on time. Avoid substantially increasing credit-card balances for moving, travel or furniture because lenders may review your credit again before closing.
Keep Your Financial Records Easy to Document
6. Do Not Make Large Deposits Without a Paper Trail
A legitimate deposit does not automatically prevent approval, but the lender may need to verify its source. Keep records for proceeds from a sale, bonuses, transfers and other significant deposits.
Gift funds may be permitted under some mortgage programs, but documentation requirements apply. Ask your lender how the gift should be transferred before accepting or depositing it.
7. Do Not Move Money Between Accounts Unnecessarily
Moving closing funds through several accounts can create additional documentation requests. Keep bank statements and transfer confirmations for any necessary transaction.
8. Do Not Switch Banks or Close Accounts Without a Plan
Changing banks does not automatically damage your mortgage application. However, it can make your recent financial history harder to document. Speak with your lender before closing or moving important funds.
9. Do Not Co-Sign a New Loan
Co-signing makes you legally responsible for another person’s debt. That obligation may be considered during underwriting even when the other borrower plans to make every payment.
Communicate About Employment and Income Changes
10. Do Not Change Your Employment Without Consulting Your Lender
A job change does not automatically result in denial, but a different employer, compensation structure, work schedule or self-employment status may require additional review.
Contact your loan officer before leaving a job, accepting a new position, becoming self-employed or changing from salary to commission income. If an unexpected change occurs, report it promptly and provide the requested documentation.
The Consumer Financial Protection Bureau explains that a preapproval is tentative and remains subject to confirmation of your financial and property information.
Frequently Asked Questions
Can I use my credit card before closing?
Routine use may not necessarily create a problem, but large purchases or higher balances could affect your credit and monthly debt. Ask your lender before making a substantial charge.
Can I change jobs while buying a home?
Possibly. The lender must evaluate the new employer, income, compensation method and any employment gap. Discuss the change before acting whenever possible.
Can a family member help with my down payment?
Some mortgage programs permit eligible gift funds. The lender may require a gift letter and documentation showing the source and transfer of the money. A loan that must be repaid should be disclosed.
More Charlotte Homebuyer Resources
Planning to Buy a Home in Charlotte?
Stone Realty Group can help you organize your home search, evaluate properties and coordinate the steps from offer through closing. Mortgage approval and lending advice should come directly from a licensed mortgage professional.
Connect with Stone Realty Group to begin planning your Charlotte-area home purchase.