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USDA Mortgage Approval: What NOT “To Do” when trying to qualify for a USDA loan!

August 7th, 2020 by usdaadmin

What NOT to do when trying to get USDA Mortgage ApprovalLast week we discussed five important things to do during the mortgage application process. Instead, today, we will review what NOT “To Do” while trying to gain USDA mortgage approval.

The following video will help keep your financing from falling off the tracks and provide important USDA mortgage approval details.

However, before we get started, don’t forget to take advantage and download our USDA Blueprint for Success with the link below.

This free guide is designed to walk you through the process step-by-step and is a great tool for both homebuyers and Realtors alike.

USDA Mortgage Approval: What NOT “To Do”

As the saying goes, “An ounce of prevention is worth a pound of cure.” Meaning, many of the mortgage qualifying issues that occur are unfortunately self-inflicted. That’s why the following list includes common mistakes that should be avoided when applying for a USDA loan.

Do NOT Apply for Credit

It can be common to receive invitations for credit cards, furniture stores, electronics,  and on and on. Simply put, do NOT respond to these offers because any additional inquires can be a factor towards lowering your credit score.

USDA minimum credit score requirements are critical and you don’t want to put yourself in a position for your loan application to be denied.

Be Cautious with Charge-offs and Collections

While this may sound like the complete opposite of what you should do, whenever you make a payment on a negative account (depending on the date it last reported to the credit bureaus) the recent payment updates the most recent activity. In turn, an old collection can turn into a new problem.

Sometimes paying off negative accounts may be a requirement of your loan approval, but that is not always the case. With our credit expertise, we can provide the pros and cons before you make a collection or charge-off payment.

Do NOT Increase Credit Card Balances

Increasing credit card balances is one of the fastest ways to bring your credit score down. Thus, make sure to NOT go on a spending spree and keep an eye on those credit card balances.

Do NOT Close a Credit Card Account

Closing out a credit card can have an immediate negative impact on your credit score because you are eliminating available credit. This can impact the very important ratio between your credit card amount owed and your available credit limit.

Do NOT Make Unexplained Deposits into your Bank Accounts

Underwriting guidelines are very strict when it comes to verifying deposits and the source of where they come from. Regardless of the amounts, be prepared to document any deposits including tough to verify cash deposits.


While this is not an all-inclusive list of what NOT “To Do” during the USDA mortgage approval process, just remember to be proactive! Ask questions so you can know how any decision can impact your financing.

If you have a qualifying question or a loan approval that is experiencing trouble, remember that I started the company way back in 2001. Let our experience be a resource for you!

free USDA mortgage resources800-806-9836 Ext. 280

Plus, you can download any of our FREE USDA Resources here. These ready to download PDFs will answer your pertinent questions.

As always, I want to thank everyone for the continued recommendations and trusting us with all of your mortgage needs.

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