Once Qualified, Stay Qualified

By
Real Estate Agent with West USA Realty

6 Don’ts After You Apply For A Mortgage

Once you are qualified for a mortgage, you want to stay qualified.  The following are items to think about when making decisions during the buying process.

money pile1. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Small, explainable deposits are fine, but getting $10,000 from your parents as a gift in cash is not. Discuss the proper way to track your assets with your loan officer.

2. Don’t make any large purchases like a new car or a bunch of new furniture. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher ratios…higher ratios make for riskier loans…and sometimes qualified borrowers are no longer qualifying.

3. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. With that obligation comes higher ratios, as well. Even if you swear you won’t be making the payments, the lender will be counting the payment against you.

4. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is a consistency of accounts. Frankly, before you even transfer money between accounts, talk to your loan officer. bank pic

5. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car, when you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

6. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more approvable. Wrong. A major component of your score is your length and depth credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. Any blip in income, assets, or credit should be reviewed and executed in a way to keep your application in the most positive light.

By following these Dont's, you will be closer to enjoying your new purchase.

If you need to consult with Mortgage Broker or Realtor about your next purchase.....

Greg Schamp, Strategic Real Estate Marketing and Your Real Estate Advisor!!!

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Rainmaker
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Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Greg, all good tips... there is so much bad info out there, when in doubt, ask your mortgage guy/gal... there is no such thing as a dumb question... But for some reason people will listen to their barber or the girl giving them a pedicure rather than the professionals that do this as a career!!

Add in #7: try not to change jobs,

and I could go on... many places to trip and cause more problems!

Apr 12, 2012 05:40 AM #1
Rainmaker
759,477
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Also add in: Keep your paperwork, dont toss your bank statements, hold onto your pay stubs, and think "paper trail" for everything, because - in the full documentation world we live in- an Under writer is going to ask for it!

Apr 12, 2012 05:44 AM #2
Rainmaker
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Greg Schamp
West USA Realty - Scottsdale, AZ

Thanks for the comments.  You never have all the answers.  You are right about the paperwork....there is always something needed that clients don't have.

Apr 12, 2012 06:32 AM #3
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Rainmaker
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Greg Schamp

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