10 TIPS WHEN APPLYING FOR A MORTGAGE
Our intent is to make the application process as painless as possible for you. Below are the top ten tips when applying for a loan that will streamline the process and make it less stressful for you! Please contact us if you have questions and thank you for trusting us with your financing needs
1. If it can be avoided, please do not quit or change your job during the application process. Employment stability is a major factor in the underwriting process. Quitting or changing jobs or even positions within the same company can potentially endanger your loan approval. If you are likely to quit or change jobs during the loan process -- even for a promotion please let us know.
2. Please do not make any large purchases on credit immediately before, or during, the loan approval process, as the additional debt must be accounted for in your qualifying ratios even if you intend to pay it off soon and even if the monthly payments are deferred.
3. Please do not have your credit run by any other vendors if you can avoid it. 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 any inquiries made within the last 120 days.
4. Please do not deposit unusually large sums of money without notifying us. Please note that any "cash" deposit is looked at very closely by an underwriter and that any unusual or large deposits outside of normal payroll deposits are often required to be documented and sourced.
5. Please do not open, close or transfer any asset accounts without first consulting us. Similar to your employment history, it is better when your banking history shows stability and is easy to document. It will also save you time as underwriters will require you to source any transfers to show where the funds originated from to determine if any came from acquiring new debt.
6. Please 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.
7. Please do not stop making payments on anything. Some people "skip" their mortgage payment while in the process of refinancing thinking it will be covered in the process. Interest is paid in arrears so if you happen to trigger a mortgage late your loan will likely be denied. Please be very careful about intentionally withholding payments or disputing a bill to any creditors during the loan process. Continuing to pay every obligation is critical at this time.
8. Please 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 as once any work has commenced the lender will not fund your loan until the work is complete and has been re-inspected by the appraiser (for an additional fee).
9. Please 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 your debt-to-income ratio as lenders hold you secondarily liable should the primary applicant choose to default on the loan. Most importantly, if the primary lien-holder fails to make timely payments your credit rating is negatively affected which could result in a loan denial or at minimum a higher interest rate charged.
10. Please be careful when completing any of the facts on your application. Underwriters tend to view things as black or white. They don’t take application errors lightly, even the unintentional ones.