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Red Rocks Credit UnionJul 18, 20232 min read

Before You Borrow: Mortgage Do’s and Don’ts

Dreaming of owning a home comes with visions of customizing your spaces and enjoying a whole new lifestyle. However, you must prepare before you can make that dream a reality. For most people, buying a home means getting a mortgage, and because home loans are among the most complex financing solutions available, they require planning and smart decision-making right from the start.

Getting pre-approved for a mortgage is a step that allows you to prepare for the entire home-buying process. Taking steps to maximize your creditworthiness and avoid making decisions that can turn lenders away is critical when seeking a pre-approval. Here are some do’s and don’ts to guide you in the months before and throughout your pre-approval process:

DO make all payments on time.

This includes all credit accounts and routine bills, such as auto loans. On-time payments are the single most significant factor in your credit score, so staying current on all your accounts is essential.

DO continue life as usual.

This includes living in your current home and working for your current employer. You should also continue using credit as you usually do, such as with credit cards or lines of credit. Making any significant shifts just before or while you’re getting a pre-approval can worry some lenders, causing them to question whether your life changes will affect your ability to repay your home loan.

DO work with knowledgeable local lenders.

Working with home loan experts in your community provides you with many benefits. For example, at Red Rocks, we make loan decisions locally, allowing greater flexibility in decision-making. We also have local lenders who are available to answer your questions one on one and are knowledgeable on various home loans like fixed-rate and adjustable-rate mortgages, conventional mortgages, jumbo, VA, USDA, FHA, and first-time homebuyer loans. Our lenders are also dialed into the local market, which can help you better navigate the home-buying process.

DON’T make significant purchases.

If you’re excited to start buying furniture or appliances or even to fill your garage with a new vehicle, put these purchases off for now. Making significant purchases changes your financial readiness to repay loans, affecting your credit score or making lenders hesitate to work with you.

DON’T make major financial or credit moves.

In particular, don’t apply for or open new credit accounts or co-sign on any loan. For any existing credit account, don’t request credit limit increases or start using more credit than usual. You should also avoid making unusual withdrawals, account transfers, or large deposits if you don’t have proof of where the funds came from.

At Red Rocks, we make our pre-approval process as effortless as possible, guiding you every step of the way, whether you’re a first-time homebuyer or shopping for your forever home. Plus, we customize all our home loan products to suit your exact needs. Learn more about our home loans here or give us a call at 303-471-7625 for assistance with your mortgage pre-approval questions.