DO get pre-approved

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Before you start shopping for a home, meet with a mortgage expert to review your financial situation and develop a solid strategy. Check your credit for any errors that could negatively affect your credit score and resolve any issues quickly. Credit scores and equity are the primary factors that effect your interest rate.

 

DO ask questions

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The loan process can seem confusing and stressful, but your lender is ready to answer all your questions and wants you to understand and feel confident throughout the mortgage process.

 

DO keep communication open

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Expect to hear often from your lender throughout the home loan process. Let the loan officer know if you will be unavailable during any part of the loan process. Check your email often and if your lender requests additional documentation, provide it as quickly as possible. The key to an on time closing is a prompt response to these requests.

 

DO pay your bills on time

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Your credit score is one of the most important factors for loan approval. Stay current on all existing accounts and do not increase the balance owed on them.

 

DO organize your financial documents

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Financial documents needed 

• Federal tax returns – all pages and schedules for the past 2 years

• W2s – last 2 years for all borrowers

• For Self-Employment – Federal Business tax returns, all pages, schedules and k-1s for the past 2 years

• Bank Statements – all pages. This cannot be a screen shot. If you do not get paper statements in the mail, go online and print each document as a full statement with name, address, and account number for identifying purposes.

• Spousal and child support – provide the fully ratified agreements

• Don’t be surprised if you have to provide updated bank statements or paystubs as you approach closing. Any new information or inconsistencies will have to be explained and verified.

 

DO be aware of re-verifications

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Right before closing, many times on the day of closing, credit and employment are re-verified. If you have a new inquiry into your credit, an explanation and verification will be required even if no account was opened.

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DON’T change jobs

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Employment changes hold up closings. You will need to wait until you have a full 30-days worth of paystubs available before you will be able to close on a new loan.

 

DON’T apply for new credit 

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Don’t buy new items on credit (common mistake: new furniture and appliances with 0% interest rate), and don’t co-sign for someone or increase your credit balances. Contact your loan officer immediately if you do. The loan must be restructured and put back through underwriting for approval. It could delay closing.

 

DON’T make large deposits or cash deposits into your account

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If you sell a car, motorcycle or boat, make sure you get a signed bill of sale, a copy of the check and an appraisal for the item to demonstrate value. Large deposits will need to be documented.

 

DON’T schedule contractors or movers for the day of closing

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Every attempt is made to close a purchase transaction on the day stated in the real estate contract. But it is not uncommon for settlements to be delayed due to the complexity of the transactions, so have a contingency plan.

 

DON’T manipulate your money

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All funds must be tracked and verified. Don’t assume no one will check, everything gets checked. 

• Changing banks and/or moving money around from one account to another requires extensive documentation.

• Any non-payroll deposits showing on any of your accounts/statements must be verified

• Gifted funds have a specific protocol that must be followed. Get the facts in advance to avoid potential issues.

• Use of business funds or loans to a shareholder can be very problematic. Review any plans for use of business assets with your loan officer.

 

DON’T be surprisedif you are asked for additional documentation

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Mortgage fraud is rampant and often one document will require an additional explanation and/or document. Regulatory changes continue to dictate most of what can seem excessive.

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