After receiving your home loan approval, being aware of issues that can impact the financing process is important. The following topics address potential challenges that may delay your closing date or even impact your ability to obtain a mortgage. Follow these tips for a smoother financing process:1
DO Inform Your Mortgage Consultant When Making Changes to Your Employment — 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 Original Documents — 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 Acounts — 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 (e.g. 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 Assume Paying Off Collections or Charge-Offs Will Improve Your Credit Score — 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 OverCharge 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 Conslidate Debt to 1 or 2 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.
DO Contact Your Mortgage Consultant — If you are unsure if something will impact your loan, don't hesitate to contact us. We are always available to answer any questions you have about the home financing process.
1. This list is only to be used as a guide and is not all-inclusive. Should events arise requiring changes to your credit, income or assets, your mortgage consultant can discuss how these changes may affect your loan application process. Edina Realty Mortgage is not a credit counselor. Information displayed is not credit advice and should not be relied upon or interrupted as such.