7 Things You Should NOT Do When Applying for a Home Loan

By
Mortgage and Lending with Peoples Bank

This is a list of things to steer clear of when you are seeking to obtain financing for a home. If you do any of these things, please contact your loan officer immediately.

Even if you have been pre-qualified, we can help you re-qualify.

1. Don’t buy or lease an auto!

Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2. Don’t move assets from one bank account to another!

These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

3. Don’t change jobs!

A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4. Don’t buy new furniture or major appliances for your “new home”!

If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet the closing costs.

5. Don’t run a credit report on yourself!

This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6. Don’t attempt to consolidate bills before speaking with your lender!

The loan officer can advise you if this needs to be done.

7. Don’t pack or ship information needed for the loan application!

Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

Comments (1)

Lorinda Ward
Keffer Realty - Norfolk, VA
Serving, Hampton Roads Virginia. Norfolk, Chesapeake, Va Beach

Great advice, I had a client that took out a $3500 loan so they can go on a trip right after we signed a contract on a property and it was accepted.  I specifically told them not to apply for anything as I tell all my clients and the loan officer told them the same thing!  But they did it anyway with the excuse that the loan officer at the credit union said it will not hurt them, if they really believed that why didn't they let me know that they wanted to take out a loan in advance.  They were already pushing the envelope to get the loan.  The wife cried so hard when it in deed halted the loan, it took a lot but we had a great loan officer and he made it happen. 

Mar 12, 2011 05:49 AM