Lenders will have to track any changes to your annual income so if possible, refrain from changing jobs or changing how you are paid at your job, especially if you’re on salary-based income by the time of your application. You’ll want to avoid becoming self-employed during this time as well. If you must move to a different job as part of your long-time career plan, make sure that it’s within the same industry and that you can justify your move.
Also, do not close any credit accounts during your home loan process. Remember that a significant part of your credit score comes from your credit history, where lenders can assess if you have been making payments on time over a long period.
You must discuss with your loan officer the proper way to document your transactions. If you are expecting a large sum of money or keeping a significant amount of cash on hand for emergencies, be prepared to show strong proof of where the money comes from. Also, save yourself from trouble by always keeping copies of deposits so you’ll have proof when you need it.
The worst-case scenario is when the borrower fails to pay the loan and your lender will have to count the payment against you. You’ll then be forced to pay that loan together with your mortgage. It’s a huge financial risk that no lender is willing to take.
