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Avoid "Mortgage Approval-Ivy". Don't Make These Mortgage Mistakes

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

 

 

Avoid "Mortgage Approval-Ivy".

Don't Make These Mortgage Mistakes

 

When our boys were little, we decided to construct a home in the Lincoln-Way Area of the Chicago Southland.  When choosing a lot to build on, we visited subdivision after subdivision in the area.  

 

After deciding on the subdivision we wanted, we began a search for our building site.  We walked property after property trying to find the "perfect" lot.  

The lot we ended up choosing was located at the highest point of the street ... great for drainage.  And the lot was filled with trees that, although small at the time, would mature into nice shade for our home once the land was cleared and sunshine could reach them.

After the construction of the home was behind us, there was still a lot to do outside in the yard.  We dug, planted, added landscaping, mowed and pruned.  After a few years passed, the flowers bloomed, the plants and shrubs matured, and the trees filled out providing the shade we had hoped for.  Everything flourished.

Even the poison ivy ...  

Poison ivy was the one negative I found living on that wooded lot.  I ended up itching ... a lot.

Now anyone that has suffered through poison ivy will tell you plain and simple ... it's awful.  The itching and irritation drive you crazy and it's hard to get rid of.  

I quickly came to the conclusion that the best solution for treating poison ivy was to NOT catch the dang stuff in the first place.  I think that's the best solution for "Mortgage Approval-Ivy" too.  

What's Mortgage Approval-Ivy?  

It's the irritation, angst, and suffering felt by mortgage applicants if they commit one of the following mistakes after receiving mortgage approval: 

     Mistake #1:  Accepting a gift or check from someone NOT named on the Contract or Loan Application and then using it for Earnest Money.

     Recommendation:  If you are the Buyer and Loan Applicant, the check for Earnest Money should be written from your funds.

     Think of this money as an advance on your down payment ... or the funds needed to Close - and therefore, that money has to be identified as being yours (or at minimum, communicate to your Loan Officer that the EM will be a gift from a Family Member.  Act proactively in this regard.  Processing will move more quickly and smoothly).     

     Alert:  Checks from Non-Borrowing, Non-Buying Parties cause problems ... and "Mortgage Approval-Ivy"!

 

     Mistake #2:  Needlessly transferring money from one bank to another ... or from one account to another within the same bank - can cause issues.      

 

     Big Misconception:  All funds needed to cover down payment and closing costs (commonly known as "Cash to Close") must be accumulated or deposited to one account.  NOT TRUE!   

     Separate bank accounts (or Investment accounts) can all be verified and documented ... and their collective balances can be totaled to demonstrate enough "Cash to Close" (funds needed by Borrower(s) for Approval/Closing).   

     Alert:  Needlessly moving funds back and forth between accounts creates a longer paper trail for documentation.  This slows the mortgage process down and causes "Mortgage Approval-Ivy". 

 

     Mistake #3:  Working fewer hours during the time leading up to your Application for Mortgage.       

      Tip:  This is especially important for hourly-paid employees.     

     Alert:  Mortgage Underwriters look unfavorably when comparing low/lower, Year-to-Date gross incomes reported on submitted pay stubs to earlier incomes/pay stubs. (The most recent pay stubs are required from Applicants at the time of Mortgage Application).  Avoid "Mortgage Approval-Ivy" by continuing to work your normal amount of hours at your job, when possible.     

 

     Mistake #4:  Accepting cash or "Gifts of Cash", then depositing them into the bank account for which the funds for Closing are then verified.     

     Tip:  There are NO acceptable means by which Cash can be verified (and found acceptable) by a Mortgage Underwriter.

     Alert:  Stay safe from "Mortgage Approval-Ivy".  STOP depositing cash into accounts provided for Mortgage Application.      

 

     Mistake #5:  Changing jobs prior to ... or after ... applying for a Mortgage without consulting with your Loan Officer (me).   

     Alert:  Even if it's a better or higher-paying job, avoid "Mortgage Approval-Ivy" by talking to your Loan Officer prior to making any change in employment.  That way your LO can advise you as to how to best proceed.

 

     The bottom line is this:  Don't subject yourself to any of these predicaments during your mortgage process.  Follow the advice of your Loan Officer from beginning to end.

 

     And should you have questions?  Contact your LO and ask them BEFORE you take any action. 

 

     It will keep "Mortgage Approval-Ivy" at bay ... and keep irritations from arising ...

 

* Hoping to Buy or Refinance a Home in New Lenox or elsewhere in the Chicagoland area? Contact me! I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

 
Gene Mundt
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed
 
American Portfolio Mortgage Corp.
nmls #175656
 
Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281


 

 

 

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

Comments (35)

Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Thank you for another great educational post, Gene. You know where this one is going  

Feb 27, 2018 11:48 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

An honor that you choose to do so, Jane Peters ... thank you!


Gene

Feb 28, 2018 11:22 AM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Lots of creepy crawly stuff in mortgage approval biz....numbered in this list..inspect the lot carefully you may not have chosen the right lender who hands them out like....well.....and spreads them around ,,,,

Feb 28, 2018 02:19 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

You have me laughing, Sally K. & David L. Hanson ... as I fear you are not alone in thinking so.  But I'm hoping that this year many find mortgage approval infectious!


Choosing the right lender is always ALWAYS important ....


Gene

Feb 28, 2018 11:24 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I hope home buyers will read this post and learn from it. Thank you for sharing 

Feb 28, 2018 02:35 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

You're welcome, Gita Bantwal ... thank you ...


Gene

Feb 28, 2018 11:25 AM
John Wiley
Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Gene, this post is a Must Read by all buyers.

Following your tips can prevent a "rash" of problems.

Thanks

Feb 28, 2018 04:11 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Ha!  Love the "rash" comment, John Wiley ...


Saw you have a new gig.  Best of luck to you, 


Gene

Feb 28, 2018 11:26 AM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, thinking about all the scenarios you've outlined made me itch. Great post for all buyers to read. Sometimes, no matter how many times they hear all the No's, they do it and do it days before closing. 

Feb 28, 2018 05:30 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

True, Beth Atalay ... and exactly why you and I share the "don'ts" and try to put the fear of ivy itches into them.  So much better when they are avoided in the first place, rather than addressed afterwards ...


Gene

Feb 28, 2018 11:27 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the great info, Gene.  I will keep this for future reference.

Feb 28, 2018 06:40 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Love hearing that, Gabe Sanders ... thank you!


Gene

Feb 28, 2018 11:28 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

Good info here. I was aware of the job change problem as well as the gifts but never thought much about the consolidation of funds as an issue.  It does make sense!

Feb 28, 2018 07:12 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Most of the rules make sense, once they are explained Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC ... and there is a reason they are in place.  Most of the time they are in place for the good of the client too.  Just my job to explain the whys, hows, etc ...


Gene

Feb 28, 2018 11:30 AM
Sharon Miller
RE/MAX Platinum - Crane Hill, AL

Gene,

The most convincing people, are those who can share a pertinent story or experience to get their point across......you nailed it!

Feb 28, 2018 07:17 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

You have me blushing, Sharon Miller ... how kind of you!  Thanks so much ...


Gene

Feb 28, 2018 11:30 AM
Dale Taylor
Re/Max 10 New Lenox Illinois http://dtaylor.remax.com - Frankfort, IL
Realtor = Chicago Illinois Homes Townhomes Condos

I can always count on you to post valuable information hopefully buyers will get before they become clients. Thanks

Feb 28, 2018 07:26 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

So good to see another Lincoln-Way Area professional sharing here and elsewhere online, Dale Taylor ... your words and follow are greatly appreciated.  Wish we could get more representation from our area involved ...


It's high time we met face to face too ... please let me know when you're free for coffee .. 


Gene

Feb 28, 2018 11:37 AM
Ron Aguilar
Gateway Mortgage Group - Saint George, UT
Mortgage & Real Estate Advisor since 1995

this is an excellent list of potential problems. Coaching in the beginning even before application should also include this. Thanks for your post

Feb 28, 2018 07:34 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Good way to put it, Ron Aguilar ... "coaching" is a huge part of what you and I do.  Thanks for commenting,


Gene 

Feb 28, 2018 11:38 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

As with Dorie Dillard , I had to get shots every week when I was young because I got poison ivy so bad. I'm still a fanatic at keeping an eye out for the evil weed when I'm in the woods.

So I totally understand your analogy - stay away from the bad stuff, buyers!

Feb 28, 2018 10:37 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Never got to the place where I had to take shots, Kat Palmiotti ... but the doc threatened it!  And you're so right.  You learn to keep a practiced eye out for the nasty stuff.  Much better than itching!


Gene

Feb 28, 2018 11:40 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Gene getting rid of poison ivy is a chore, I listened to the guy on NPR and how he does it is a big deal. Good points for borrowers to know as they make application and move towards settlement.

Feb 28, 2018 10:54 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I tried everything I could to keep the stuff at bay, Nick & Trudy Vandekar, 610-203-4543 ... I just think it was a losing battle on this particular lot with so much woods surrounding it.  But every new theory got tested, that's for sure ... I hated to admit defeat!


Thanks for your thumbs up!


Gene

Feb 28, 2018 11:42 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene great advice what pitfalls to avoid, when I bought my first home my father gave me the down payment and he made sure it was in my account and I wrote the check....Endre

Feb 28, 2018 09:38 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
The "rules" for accomplishing much in the mortgage process are not hard .. but they are undeniably strict and must be followed. You did just that and closed successfully, Endre. Proof that the process works when respected and followed ...
Gene
Mar 01, 2018 05:30 AM
Andrea Moore
Welcome Home Loans, LLC - Winter Garden, FL

Such great advice! The endless bank statement papertrail is one of my biggest headaches. Knowing all of this upfront as a buyer can really minimize the need for a lot of paperwork during the process.

Mar 01, 2018 11:06 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Hi Andrea Moore ... such a great pic you have for your profile!  


And you're right.  The more these issues are known and avoided, the easier the process goes for the client ... and the LO too.  I'm all for avoiding these types of headaches ...


Thanks for commenting,


Gene 


 

Mar 02, 2018 11:02 AM
Leslie Currle
Alcova Mortgage LLC - Luray, VA
With you, every step of the way

Great advice, Gene!  Thanks so much for sharing.

Mar 02, 2018 08:52 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Glad you found the info beneficial, Leslie Currle ...


And LOVE your area of VA!  Our youngest son is a proud grad of Virginia Military Institute.  We tried to visit much of the surrounding Lexington area each time we visited him there.  Absolutely beautiful ... I'm jealous!


Gene 

Mar 02, 2018 11:11 AM
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Gene, your analogy is so correct. Doing any of the things you mentioned will make the process take much longer and make everyone involved, frustrated.  

Mar 03, 2018 04:10 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I'm sure you've met these situations too, JoAnn Moore ... and you're so right, they are frustrating as we know that they can be avoided.  Appreciate your stopping by and commenting .. thank you,


Gene

Mar 07, 2018 07:33 AM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Gene, great advice for buyers to heed... and you need to stay away from that poison ivy :)

Mar 04, 2018 06:57 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I hear ya, Rebecca Gaujot, Realtor® ... and I will do!


Gene

Mar 07, 2018 07:33 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Gene - as always, great advice.  It's so important to be "aware" of all the ways a mortgage can go south prior to approval. Ugh!

Mar 06, 2018 08:46 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thanks so much, Jan Green ... and "awareness" cures many mortgage ills, no doubt about it ...


Gene

Mar 07, 2018 07:34 AM
Roy Kelley
Retired - Gaithersburg, MD

Congratulations on your feature recognition. This is excellent advice to share with prospective mortgage borrowers.

Mar 12, 2018 05:54 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thank you, Roy Kelley ... always glad to see you stop by!


Gene

Mar 12, 2018 09:48 AM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Great cautions to be heeded when mortgage consideratins are in the air ! 

May 15, 2018 03:00 AM