Being a Mortgage Broker enables me to shop your loan scenario with many Lenders/Investors, not just one bank or a Credit Union. My goal is the same as your goal; obtain the lowest price and interest rate available for your scenario. Below is a top-ten Do’s and Don’ts list from Julie Gregory, one of the many Lender Representatives we do business with. It’s a straight forward and to-the-point list. If you’ve broken one or more of the rules listed below, don’t panic, just contact me and we’ll come up with a solution.
The following has been provided by one of our Lender Representatives:
Part of providing excellent service is educating our borrowers. A lot of people don’t know the simple rules that we industry professionals do.
There is no “complete list” of Do’s and Don’ts for mortgage applicants, but there are 10 “no-no’s” which stand out, and which continue to ensnare mortgage applicants nationwide. Keep this list below handy. It will help ensure that your mortgage application process goes faster, more smoothly, and with a lot less stress.
10 TIPS for borrowers:
Do NOT quit your job or change jobs. Employment stability is a major factor in the underwriting process. Quitting or changing jobs, or even positions within the same company can greatly endanger your loan approval. If you are likely to quit or change jobs during your application process — even for a promotion — consult your loan officer immediately.
Do NOT make any large purchases immediately before, or during, the loan approval process, either with cash or credit. In addition to cutting into the money available for your down payment, you may add to your monthly expenses and underwriters don’t want to see an increase in your debt-to-income ratios.
Do NOT have your credit pulled. Too many inquiries during a certain time period can negatively impact your credit score. Additionally, you’ll create extra work for yourself. Most underwriters will ask for a letter of explanation about the inquiries made.
Do NOT obtain and/or deposit unusually large sums of money without notifying your loan officer. Remember “cash” is looked at very closely by an underwriter. Unusual deposits outside of normal payroll deposits are often required to be documented and sourced.
Do NOT open, close or transfer any asset accounts without first consulting your loan officer. Similar to your employment history, it’s better when your banking history shows stability.
Do NOT open, abnormally increase nor abnormally decrease your credit balances. Although it may seem ridiculous, paying off an account can actually do more harm than good.
Do NOT stop making payments on anything. For various reasons, some people “skip” their mortgage payment while in the process of refinancing; or otherwise choose to dispute a bill. Be very careful about intentionally withholding payments to creditors. Continuing to pay every obligation is critical.
Do NOT start that long overdue home improvement project you’ve been thinking about for a few years. This is especially important when the home improvement project requires you to take out a loan.
Do NOT co-sign on a loan for anyone. Even if you’re not supposed to be responsible for monthly payments, co-signing on a loan can increase debt-to-income ratio and reverse a mortgage approval.
Do NOT fudge any of the facts on your application. Underwriters live in a world that’s black or white. They don’t take application errors lightly, even the unintentional ones.
In addition, here are some bonus tips:
Do NOT finance cosmetic or elective medical procedures. Delay such work until after your closing.
Do NOT solicit mortgage advice from people who aren’t actual loan officers. Your friend who had her real estate license in 2001 is not a mortgage market expert.
Do NOT start a loan just before leaving the country unless you will be reachable by phone and email.
Do NOT become obsessive about how the credit card balances on your mortgage application fail to line up exactly with the actual, living balances on those accounts.
Relax; I’m always available to help.