Ruining loan pre-approval is easier than you think
You're shopping for a house and were smart enough to get pre-approved for a loan. Great. Now what do you do?
Nothing that could change your financial picture.
Michele Lerner is a personal finance expert at HSH.com. She reminds us that a preapproval letter is typically valid for 90 days as long as your finances stay the same.
"You want to look the same on paper when it's time to go to settlement as you do at the beginning of your loan approval," Lerner says.
"The most important couple of things are not to apply for any new credit and not to make any make any major purchases on credit. A lot of people, you're buying a house, you think it's smart idea to get a credit card with The Home Depot or buy some new furniture and use a credit card for that. The problem is: it could completely derail your purchase if it means your debt it too high, but it also changes your credit score and every lender will recheck that just a few days before settlement," Lerner adds.
Don't do anything - co-sign a loan or make late payments - anything that could damage your credit score.
You're Preapproved - Now Don't Blow It