Hey, this is Casey Lown with Strategic Mortgage Solutions. I want to share with you ten things to avoid when you are thinking about applying for a mortgage or things to refrain from during the actual mortgage process.
1. Changing Your Job
Stay away from changing your job, or at least don’t change it without consulting your mortgage advisor first. You’d be amazed at how many deals get killed because somebody changed their job during the mortgage process and didn’t tell their mortgage advisor about it.
2. Attaining Any New Debt
Refrain from applying for any new debt, whether it’s a car loan, a credit card, or anything really. When you apply for something while you’re in the midst of the mortgage process, lenders are monitoring your credit. If they see a credit inquiry, they’re going to ask about it. If that inquiry led to you getting a new debt, they’re going to want paperwork about it. If the paperwork shows that the new debt is of such that it now makes it to where you don’t have enough cash flow to qualify for the mortgage you’re applying for, your deal is killed.
3. Restrict From Moving Money
Restrict moving money from one bank to another bank while you’re in the midst of the mortgage process without talking to your mortgage advisor first. Now five, ten, thirty bucks, is fine. Five thousand dollars? You better call your mortgage advisor. Baked into the underwriting guidelines are requirements for lenders to monitor against money laundering and fraudulent activity. If you have a really large deposit come in or have money transferred from one source to another, they’re going to ask you for paperwork to source where that money came from. The less paperwork you have to provide, the better. So before you move any money, talk to your mortgage adviser first.
4. Seek More Quotes
Even if your realtor or a great friend recommended you to talk to their awesome mortgage lender, you’re going to want to get at least a couple more mortgage quotes on top of that. The reason is that different lending institutions may have different programs available to you that other ones don’t. These same lenders may also offer you rates and fees that are different for the very same program that you might qualify for already with one different lender. I mean, you shop for car insurance, shouldn’t you also shop for a mortgage?
5. Stop Overcharging
Be mindful of how you utilize the credit you already have. You would be amazed! When somebody charges up their credit card, as they charge that sucker up it can affect your credit score and bring it down. How you utilize credit, and how it affects your score, can affect the terms of the mortgage that you get from that lender.
6. Be Careful With Deposit Activity
Be careful about the deposit activity you make within your bank account. If you are getting a gift from, say, your grandmother, or your parents, before you deposit that money, contact your mortgage adviser about it. The reason is that I’ve seen it. When somebody gets a gift from a grandparent, the lender is going to require (because of the nature of the mortgage program they have gotten approved for) that grandparent’s bank statements to source that the money actually came from the grandmother. But what if they don’t want to provide those bank statements? So having an advance conversation about any certain large deposit activity is really crucial so you can understand what kind of paperwork is going to be required from you, and the donor of that gift. That way, you can make sure that runway 12 is clear for being able to produce that paperwork when the time comes to apply for that mortgage.
7. Accuracy On Your Application
Make sure you fill out the mortgage application, at the time of pre-qualification, accurately. Try not to fib, and be sure not to forget any pertinent information as it may relate to your job history, your income, or the assets that you may have available for a down payment. Any question that it asks, if you have any concerns about how you’re going to answer it, talk to a mortgage advisor. See what they would recommend putting on paper for you. So that way, it’s not a situation of garbage in, garbage out, and you get turned down for the loan.
8. Do Not Co-Sign
Do not co-sign for any of your friends or family members while you’re in the process of trying to get a mortgage, whether you’re cosigning or you are personally applying for a debt for yourself. It’s almost no difference. If you have a brother, a sister, or a daughter who just had a car breakdown and you need to be a cosigner in order for them to qualify for that new car loan, don’t cosign until you talk to your mortgage adviser. So many deals have got killed because of somebody being nice and co-signing for someone.
9. Avoid Changing Banks
Avoid changing banks leading up to, or in the middle of your buying or refinancing a house. When you open up a brand new account, that bank is not going to be able to provide you with much or any paperwork or statements related to the activity of that bank account for a couple of weeks, or it could be a month or so. Most mortgage lending institutions are going to require you to produce bank paperwork. If you just opened up a new bank account and deposit all your money into that account that you saved for your down payment, it could create some extra hoops and paperwork nightmares that would just be better to avoid until after the loan closes.
10. Always Consult Your Mortgage Advisor
Always consult your mortgage advisor if you’re contemplating any significant changes in your financial credit or personal life. I’m not saying, “Hey, you know, I’m thinking about breaking up with my girlfriend,” is something that you should consult your mortgage advisor about. But again, there are certain aspects of your financial life that, if you made a significant change leading up to applying, or in the middle of your trying to apply for a mortgage, could adversely affect you situationally in how you could qualify for the said mortgage. So, think of that mortgage advisor as somebody that’s not just helping you get a loan, but they’re also your consultant as it relates to matters of debt, credit, income, and your financial well-being.
Anyway, I hope you enjoyed this. If you’re somebody that’s thinking about buying a house or refinancing, follow us on Facebook so that way you can see other posts and videos that you might find informative and engaging as it relates to mortgage financing. Thank you.