Thinking about moving? Don’t let preapproval mistakes stop your new home plans in Greenville or Spartanburg.
So, you’re thinking about moving? Maybe life’s changed… a new job, more kids (or fewer!), or you just want a fresh start. Whatever the reason, your home should fit your life, and if it doesn’t, it’s time for a change. And guess what? That’s perfectly okay.
At Team Matsuda Realtors, we see it all the time, and we’re here to help you through it. It’s your life, your rules—there’s zero shame in wanting or needing a new place. Plus, just so you know, mortgage rates are looking pretty good right now. If you’ve been thinking about a move, now could be a great time to dive in! 😉
But before we get ahead of ourselves, let’s talk about one big first step: getting preapproved for your mortgage. We’ve seen some common slip-ups that can mess with your preapproval, and we’re here to make sure that doesn’t happen to you. Let’s break down the six mistakes you don’t want to make. And don’t worry—we’ll keep it simple and easy.
6 Preapproval Mistakes to Avoid (and How to Fix Them!)
1. Closing Credit Accounts Too Early
You’ve paid off a credit card—woohoo! But before you rush to close it, hang tight. Closing that account might feel like the right move, but it can actually hurt your chances of getting preapproved. Here’s why: lenders want to see that you have a solid credit history, and that means keeping accounts open. You’ll need at least two current lines of credit with a two-year payment history to boost your chances. So, before you close anything, check with a mortgage broker to see how it could impact your score.
2. Focusing Only on High-Interest Debt
Paying down high-interest debt? Good call. But what really matters for preapproval is your credit utilization ratio, aka how much of your credit you’re using. If one of your cards is maxed out (or close to it), that’s going to hurt your chances. The sweet spot is keeping your balance below 50% of your credit limit—30% is even better. If you’ve got a few cards over 50%, paying those down will help a lot more than just focusing on high-interest ones.
3. Taking Out Big Loans Before Buying
Life happens, and sometimes a big expense (like a new car or student loan) comes up. But here’s the thing: taking out a big loan right before getting preapproved can mess up your debt-to-income ratio. Lenders look closely at how much debt you have compared to your income, and adding more debt right before buying a home? Not a great idea. If you can, hold off on those big purchases until after you’ve got the keys to your new place.
4. Paying Off Old Debts That Don’t Matter
Got some old debts hanging out in collections? Before you rush to pay them off, take a second to check if they’re still affecting your credit. Depending on where you live (shout out to South Carolina), some of those old debts might not even matter anymore. In some cases, collection agencies only have three to six years to collect on debts, but it varies by state. Check with a mortgage expert or attorney before you hand over cash for debts that might already be past their expiration date.
5. Switching Jobs or Changing How You Get Paid
We love a good career move, but if you’re about to buy a house, timing is everything. Lenders want to see steady income—usually over the past two years. If your income is commission-based or from self-employment, it can get a little trickier because they’ll need to see two years of those earnings to approve you. So, if you’re thinking about switching jobs, you might want to hold off until after you’re settled into your new home.
6. Waiting Too Long to Cash Out Investments
Planning to use investments like stocks or mutual funds for your down payment? Make sure you cash them out ahead of time. Lenders only count part of your investments’ value (usually 65-75%) because they can fluctuate, and it costs money to sell them. Waiting until the last minute can leave you short on cash reserves. So, to avoid any headaches, sell your investments early so the lender can count their full value (minus selling costs).
Ready to Make Your Move?
We know life changes quickly, and if you’re ready for a fresh start in Greenville or Spartanburg, we’re right here with you. Whether you’re upsizing, downsizing, or just want to be in a different neighborhood, Team Matsuda Realtors has your back. We’ll help you navigate the mortgage preapproval process and make sure you avoid these common pitfalls so you can focus on finding a home that feels just right.
Sound good? Contact us today, and we’ll be with you every step of the way! 🎉
Follow @TeamMatsudaRealtors on Instagram and Facebook!
Stay in the loop with everything Greenville, Spartanburg, and the Upstate! We’re sharing local tips, behind-the-scenes moments, and the latest real estate updates. Follow us on Instagram and Facebook @TeamMatsudaRealtors and let’s keep the connection going!
Contact Team Matsuda Realtors
Looking to buy or sell in the Upstate? Fill out the form below, and Team Matsuda will get back to you with personalized advice and local expertise. Let’s make your next move seamless in Greenville, Spartanburg, and beyond!
