Coldwell Banker’s mortgage adviser Debra Isaac recently presented a presentation on the do’s and don’ts of a loan transaction.
One of the many challenges with mortgages today is the increased underwriting requirements required largely due to government involvement. At times, these requirements seem ridiculous.
If you got a mortgage in the past, do your best to not get frustrated with today’s mortgage process.
Here are Isaac’s do’s and don’ts:
• Do not inquire, open or apply for any new credit or take on any new debt during the loan process. Wait until your loan is funded and you get a payment letter.
Your credit can be verified up to three times during the loan process, so be patient.
• Stay current on all payments. Pay everything on time and keep any charges on existing credit cards to a minimum.
Do not make any major purchases, including furniture, appliances, cars or anything for a house you do not yet own.
• Do not close any accounts including installment and/or revolving credit or payoff charge-offs and/or collections. This can lower your credit score. Talk to the lender first.
• Do talk to the lender first about transferring funds from one account to another, changing any bank accounts or depositing large sums of money that don’t typically match your deposit pattern.
• Save money. There are always unexpected costs when buying a home: moving costs, utility deposits, etc. Be prepared to pay out of pocket and up front for inspections.
• Do not amend your tax returns during the transaction without informing the lender as this can seriously impact qualifying for a loan.
• Provide any requested or required loan documentation items promptly, accurately and completely. Be up front on all matters.
• Once the loan process begins, do not shred any income or financial documents that you could not retrieve again.
Some of your earning and financial statements will need to be updated and current within 30 days of the closing date.
Retain everything until after the transaction has closed.
• Do not mark through or black out any information on your personal documentation. The underwriters could possibly not accept this as verification as the documents have been altered.
• If refinancing, keep making your mortgage payments. It will be reconciled at closing if there is an overage. A late payment at closing can kill the transaction.
• Do not change or quit your job during the loan process or once the loan is approved. Lenders will verify your employment on the day your loan is to close and fund.
If there are any changes to your income status that were not disclosed, your loan could be canceled. If a job offer arises during the transaction, contact the lender first.
There are certain changes of employment that are acceptable during a loan transaction.
• Do inform the lender in advance of any upcoming trips, vacations or dates that could make you unavailable during the loan process. Also, do check your voice messages and e-mails frequently, respond promptly and be available as needed.
• Don’t get discouraged when you are asked for additional documentation. It doesn’t necessarily mean there is a problem. The lender may only need to clarify something found on another document. They really do want to close your loan.
Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.