|
Buying a Home? Head Off Problems with Some Inside Information
Create a file and start saving important papers that your
Loan Officer will need at time of application, throughout
the loan process and prior to closing. Clean up your credit. Before you apply, order a copy your credit report and
FICO score. You'll learn exactly what information will be used to determine
how much money you qualify for and, most important, what negative information
appears that will affect your application and interest rate.
For example, if you have had several late payments, start six months prior
to applying for your mortgage and make payments on time, every time. That
may improve your credit score and the interest you'll pay on your loan. Plus,
you'll have enough time to contact the credit bureaus in writing to explain or
correct any inaccurate information.
Collect your records. Start now to get the required documentation in order.
Create a file and start saving important papers that your Loan Officer will
need at time of application, throughout the loan process and prior to closing.
Here are some helpful DOs and DON'Ts to prepare for the application and
speed the approval
- DO keep originals of all pay-stubs, bank statements and other important
financial documentation. Your lender is required to update any documents
that are more than 30 days old prior to the closing of your mortgage loan.
(This is required even if your loan is approved.)
- DO have a copy of your employment history for the past two years,
including contact information.
- DO have your residence history for the past two years available, such
as your rental agreements or your mortgage account number.
- DO have a copy of your Social Security card.
- DO have a copy of your divorce decree, if applicable.
- DO have copies of your federal income taxes for the past two years.
- DO provide all documentation for the sale of your current home. (e.g.,
sales contract, closing statement, employer relocation/buyout program.)
- DO notify your Loan Officer if you plan to receive gift funds for closing costs.
- DO notify your Loan Officer of any employment changes. (e.g., change of
employer, recent raise/promotion, transfer, change of pay status, such as
salary to commission scale, etc.)
- DO NOT change jobs/employers without inquiring about the impact this
change would have on the approval of your mortgage loan.
- DO NOT make major purchases during or prior to closing (e.g., new car,
furniture, appliances, electronics) as this may affect your qualification
ratios. Please confer with your Loan Officer to have him/her calculate what
your ratios would be with any additional debts.
- DO NOT obtain and/or deposit unusually large sums of money without notifying
your Loan Officer. FNMA/HUD guidelines require documentation as to
the source of these funds (e.g., copy of bonus check, copy of tax refund,
copy of insurance settlement, gift letter with copy of check and deposit
slips, etc.)
- DO NOT close/open or transfer any asset accounts without inquiring about
the proper documentation required for your loan file. (i.e., If you transfer all
the funds in your stock account to your savings account, documentation is
required.)
- DO NOT open or increase any liabilities, including credit cards, signature
loans, etc., during the loan process. Please check with your Loan Officer
for any documentation that will be required and what impact this would
have on your qualification ratios.
For most people, this is just a matter of organizing documents they already
have on hand and using common sense. Taking a little time to get your
papers in order for the Loan Officer will make the application easy and the
approval process swift. A little time spent now means a lot of time – and
even money – saved later.
|
