Mortgage Application Advice

Do’s and Don’ts During the Mortgage Application Process

Do:

  • mortgage-approvedPay your bills. This includes rent, car loans, personal loans, credit cards, child support, school loans, alimony, etc. If you don’t make timely payments, a bank likely won’t be willing to lend to you.
  • Stay at your job. Make sure that your employment status stays the same. We recommend not taking a leave of absence, switching to part-time, accepting 100% commission position, or becoming self-employed.
  • Provide all documentation requested. Even if you feel the lender doesn’t need an item, make sure to provide it to them anyway. This will help to ensure that you close on time.
  • File your taxes. File your taxes on time or if you aren’t ready to file, apply for an extension. If you owe money to the IRS, pay them or work out a payment plan.
  • Keep your down payment money before closing. Make sure that your down payment is safe and is not spent before closing.

Don’t:

  • Do not change your marital status. Getting married or divorced can have a big impact on the ratios used for mortgage approval.
  • Do not overdraft your bank account. This is a red flag that you may be less responsible with money.
  • Do not forget to source deposits and/or funds to close. Money for closing has to be sourced with a paper trail. Sourcing (copy of; check, bank account showing withdrawel, deposit slip, etc.) of any large, non-regular deposits will be needed. This also applies to monies transferred between accounts.
  • Do not open new accounts or make large purchases on your credit cards. It is safer to buy furniture or appliances after your home loan closes. Opening new accounts or charging on your credit cards can lower your credit score and affect mortgage ratios.
  • Do not co-sign on a loan. Your credit rating is affected when you co-sign and this can impact how much you can borrow.

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