Keep your credit at its peak during the loan approval process.

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Let’s say you’ve found your dream home, made a deal with the seller, and received a loan pre-approval from your Mortgage Loan Originator (MLO). Everything’s on track, and your MLO is texting you status updates as your loan is processed and underwritten. Nothing could go wrong, right?


Being approved for a mortgage is a much bigger deal than other credit transactions. It requires an extensive credit review, which includes several credit score “pulls”. If your score dips for any reason during any stage of underwriting, it could slow down or complicate your loan application.

Here are examples of credit transactions you’ll want to avoid until your mortgage is finalized and you’ve moved into your new home.

Applying for a new credit card.

This can be an easy mistake to make. Here’s an example of how it might happen: You’re paying for some items at your favorite store, and the friendly cashier tells you you’re pre-approved for a store credit card. You’ll get a 20% discount on the day’s purchases if you accept the card…so you do.

While one new credit account may not disqualify you for a mortgage, chances are it’ll temporarily lower your credit score. If you use the card to buy a houseful of new furniture or appliances, you may lower your score even more. So it’s best to Just Say No to these offers, no matter how attractive they may be.

Shopping for credit-related discounts.

Some credit cards lure new customers by helping them save money. For example, you may be invited to transfer your high-interest credit card balances to a new card offering a low or 0% “intro rate”. While you’ll save some money, you’ll also lower your credit score every time you do this. So if you’re in the habit of “churning” credit accounts to save money, put this on hold while your loan’s being processed.

Other financial no-nos.

Don’t open any new bank accounts, or move money between accounts. Here’s why: As your loan application is processed, all your financial statements will be reviewed. These include checking and savings, money market funds and other liquid assets. Changing banks or transferring money between accounts may complicate this review and slow the approval process.

If you have questions about the mortgage underwriting process, contact KBHS Home Loans today. You can rely on us for friendly advice and a fast path to closing. 


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