Here are some Do's and Don'ts of the Mortgage Process.
DO When Planning to Apply:
Keep your papers and file accordingly.
Maintain ongoing documentation related to income, employement, and debts/obligations. Keeping your W2s, tax return docs, bank statements, pay stubs, and other relevant documents handy.
Provide money deposit receipts
This includes an earnest money deposit from your personal bank account or gift funds. Gift funds are acceptable only if certain criteria are met – be sure to clarify this for your individual situation.
Maintain employment and income
You must show stability throughout the mortgage application period. This process goes much smoother if you keep your income steady and avoid major changes. Pay raises/promotions are exceptions to this expectation, though!
Create a savings plan
Buying a house is an exciting time for any homebuyer, yes, but focusing on saving during this period is key. Funds are needed for an earnest money deposit, down payment and/or closing costs, furniture, appliances, and other major purchases could impact your credit.
Understand credit pulls
You need to be mindful that your lendor may pull a new credit report just prior to closing to check for new debt. If your recent credit activity raises a concern, they’ll need to ask them to explain. So, avoid
Ask questions and communicate
At any point in the process, your loan team should be there to help you and answer any questions that you may have.
DONT'S after you apply:
Close or open bank accounts
Before you open, close, or transfer money across accounts, check with your lendor on how this may affect your qualification or documentation. Reminder: changes could result in a delay for the loan origination.
Make large bank deposits
If you deposit any money outside of automated payroll deposits, especially cash, check with your lender on the documentation you’ll need to provide to verify the money's sources.
Change jobs, employer or employment
To be clear, you can change jobs, as well as amend any tax returns, but you’ll need to make your lender aware because it may impact your qualification and documentation. If shifts do occur, you may need a new loan approval.
Make major purchases
This involves large spending prior to or during the contract period. It may be tempting to want to get new furniture, a car or house appliances, but these purchases may hurt your savings, debt-to-income ratio and credit utilization.
Open a new line of credit
This also includes closing credit lines, co-signing on loans, or making major purchases on credit cards.
Panic, stress or isolate
Your lender wants you to be successful, knowledgeable, and confident during this process. Whatever your finances, make sure to stay in the loop and to be sure to include all debts and liabilities on your mortgage application. Keep the lines of communication open and trust your lender to help you across the finish line.
