While you are considering the purchase of a new home or exploring new financing on your current home, you need to be aware of what things might adversely affect your loan. Your credit, income and assets are verified after you submit your application and in some instances right before closing. Following these tips throughout the loan process can be very important. The key is to call us if you wish to make any changes to your financial picture, even it seems like a simple, logical thing to do. To have your Buyer Advantage loan commitment or your pre-approval remain valid, please pay close attention to the Do’s and Don’ts listed below:
DO CALL YOUR MORTGAGE CONSULTANT
If you are unsure if something will impact your loan, call.
Employment stability is a big factor in the underwriting process. Quitting, changing jobs or even changing positions in same company can greatly impact your loan approval. Inform us immediately of any changes to your job, position or income.
- DO KEEP ORIGINALS
Keep originals of all paystubs, bank statements and other financial documents.
- DO KEEP AND PROVIDE ALL DOCUMENTATION FOR THE SALE OF YOUR CURRENT HOME
Provide all documents for the sale of your current home if selling it. Examples: sales contract, closing statement, employer relocation buyout program, etc.
- DO STAY CURRENT ON EXISTING ACCOUNTS
Late payments on current accounts like mortgage, car payment, charge cards, etc. will impact your credit score which identifies your likeliness to repay your debts. Make your mortgage payments on time but call us before you make any payments that are scheduled within two weeks of closing.
- DO CONTINUE TO USE YOUR CREDIT AS YOU NORMALLY WOULD
Red flags are easily raised within the scoring system. If it appears you are diverting from your normal spending patterns, it could cause your score to go down. For example, if you’ve had a monthly service for cable billed to the same credit card for the past two years, don’t change that now. Make any changes after loan closing.
- DON’T APPLY FOR NEW CREDIT OR INCREASE ANY CURRENT LIABILITIES (credit cards, signature loans, etc.)
Avoid making major purchases such as cars, lines of credit for furniture, appliances, computers, etc. If you receive an invitation to apply for new lines of credit or to increase existing credit, don’t respond. If you do, that company will pull your credit report and this will have an adverse effect on your credit score.
- DON’T PAY OFF COLLECTIONS OR CHARGE-OFFS
Generally, paying off old collections causes a drop in the credit score. Don’t pay off any collections unless we specifically ask you to in order to secure the loan.
- DON’T MAX OUT OR OVER CHARGE EXISTING CREDIT CARDS
Running up credit cards is the fastest way to bring a credit score down. Try to keep credit cards below 30% of the available limit.
- DON’T CONSOLIDATE DEBT TO ONE OR TWO CARDS or CLOSE CREDIT CARD ACCOUNTS
This may change your qualification ratio of debt to available credit which also affects your credit score. You want to keep an active beneficial credit history on your record. If you really want to do these things, do it after you close your mortgage loan.
- DON’T RAISE RED FLAGS
Don’t co-sign on another person’s loan or change your name and address. The less activity that occurs while your loan is in process, the smoother the process.
- DON’T MAKE LARGE UNEXPLAINABLE DEPOSITS INTO BANK ACCOUNTS
Deposit amounts exceeding past history will be questioned by an underwriter unless the deposit is a documented gift. If you are getting a gift, call (gifts require specific documentation) your Mortgage Consultant to discuss.
- DON’T MAKE ANY ADJUSTMENTS OR TRANSFERS IN YOUR ASSET PICTURE
Don’t change investments, move positions, close, open or transfer any savings or other asset accounts without contacting us first.