I recently caught up with Troy Silhan, Production Manager and resident mortgage expert for Bank of England. He works with many local homeowners and was happy to provide major tips on what NOT to do before and during the loan process. The obvious list of problems to avoid includes pay your bills on time, save for a down payment, and so on. Here are some tips you might not have thought of:

1. DON’T change your name.
Regardless of the occasion (marriage or divorce), make sure not to change your surname when applying for a mortgage. As Troy says, “If you applied for a mortgage as Ms. Jones, then became Mrs. Smith, there is additional paperwork and things to do to make sure you are, in fact, one in the same person.” Your loan officer can let you know when you’re cleared to make the change!

2. DON’T close any existing lines of credit.
It’s actually better to leave revolving lines of credit (including credit cards) open. Troy explains that it can actually lower your credit score to close them. “Part of your credit score is based on the length of time you have owned a particular credit card, and you benefit from that the longer you have the card. When you close the account, you lose the history associated with the account and your score can drop.”

3. DON’T apply for a credit card or auto loan, or co-sign a loan.
Pulling your credit often can lower your credit score. If you purchase a car, open new credit cards or co-sign for something it can increase your debt-to-income ratio (which is one of the three determining factors when being approved for a mortgage loan). Simple rule – If the debt-to-income ratio goes up, the amount of house you can afford goes down.

4. DON’T schedule any services until the closing date has been confirmed.
Troy warns not to schedule any services for the new home (like turning on the electricity or scheduling hardwood floor installation) until the closing date has been confirmed by both the title company and the lender. It’s a mistake to schedule services until you are cleared to close through underwriting!

5. DON’T spend funds marked for closing.
This one is a big deal. Troy explains, “If you saved up the money for the down payment and closing cost, you must have the money available at closing. If you begin to hire moving people, purchase furniture for the house, hire lawn care, etc. with cash for the home you do not own, that can prevent you from getting the home loan.” Simply avoid touching those closing funds all together until you leave the closing table!

Other don’ts? Don’t deposit large amounts of cash into your bank account, miss credit card payment, max out your credit card, borrow money to close or funds for your earnest money/binder, or change jobs/employers. If you have questions, make sure to speak with Troy before you move money!

Learn more about starting the loan process by contacting Troy Silhan at (904) 217-9489 or TSilhan@boejax.com.