Eight tips between mortgage approval and possession date

In light of the new market realities and tightening of credit underwriting standards by both lenders and mortgage default insurers (CMHC, Genworth and Canada Guaranty) as of late, keep in mind that now – more than ever – it’s important to be careful what you do between the time your mortgage is approved and when it funds.

A few mortgage lenders and insurers have been doing something lately that they have not done in a long time – pulling new credit bureaus prior to funding, especially if there is a long period between the time of your approval and when the mortgage actually funds.

Following are eight tips to keep in mind between your mortgage approval and funding dates:

1. Don’t buy a new car or trade-up to a more expensive lease.

2. Don’t quit your job or change jobs. Even if it’s a better-paying job, you still are likely to be on a probationary period. If in doubt, call your mortgage professional and they can let you know if this may jeopardize your approval.

3. Don’t change industries, decide to become self-employed or accept a contract position even if it’s within the same industry. Delay the start of your new job, self-employment or contract status until after the funding date of your mortgage.

4. Don’t transfer large sums of money between bank accounts. Lenders get especially skittish about this one because it looks like you’re borrowing money. Be ready to document cash transactions or money movements.

5. Don’t forget to pay your bills on time, even ones that you’re disputing. This can be a real deal-breaker. If the lender pulls your credit bureau prior to closing and sees a collection or a delinquent account, the best you can hope for is that they make you pay off the account before they will fund. You don’t want to have to scramble to pay off a debt at the last minute!

6. Don’t open new credit cards. Again, just wait until after you have moved in to your new home or completed your refinance mortgage.

7. Don’t accept a cash gift without properly documenting it – even if this is from proceeds of a wedding. If you have a bunch of cash to deposit before your funding date, give your mortgage professional a call before you deposit it.

8. Don’t buy furniture on the “Do not pay for XX years plan” until after funding. Even though you don’t have to pay now, it will still be reported on your credit bureau, and will become an issue – especially if your approval was tight to begin with.

While you may not risk losing your mortgage approval because you have broken one of these rules, it’s always best to talk to your mortgage professional before doing any of the above just to make sure!

Jean-Guy Turcotte is an Accredited Mortgage Professional with DLC Regional Mortgage Group and can be reached for appointments by calling 403-343-1125, texting 403-391-2552 or emailing jturcotte@regionalmortgage.ca.

Just Posted

Red Deer prepares for Alberta Country Music Awards

The final round of voting to select award winners ends Dec. 28th

Mustard Seed and Turning Point hosted event on opioid and substance abuse

Landon Hildebrand says reducing stigma round drug addiction can begin to help treatment

Festival of Trees brings in $1.1 million

Red Deer Regional Hospital to benefit from proceeds

Jessa Pellerin presents ‘Heart Key’ exhibit at The Hub

Exhibit showcases custom signs ‘made with love’

WATCH: CP Holiday Train rolls into Lacombe

Kelly Prescott performed for hundreds of Central Albertans

No flood of extremist returnees to Canada expected, federal report says

The report says some 190 people with connections to Canada are suspected of terrorist activity abroad

Canadian physicist who won Nobel Prize touts science for the sake of science

Donna Strickland, 59, said securing the field’s highest honour has given her a significant new platform

Climate change, receding glaciers increase landslide risk on B.C.’s Mount Meager

Climate change is causing glaciers atop Mount Meager, in British Columbia, to shrink increasing the chances of landslides and even a new eruption, says one expert.

UK’s May lobbies EU leaders in fight to save Brexit deal

Top European Union officials ruled out Tuesday any renegotiation of the divorce agreement with Britain.

Former Canadian diplomat detained in China amid rising tensions: reports

A former Canadian diplomat has been arrested in China, according to media reports and the international think tank he works for.

Time magazine’s 2018 person of the year

The group is made up of four journalists and are the “guardians and the war on truth”

Most Read