What to do during the Mortgage Loan Process?
My friend Randi Wright gave this advice to me the first week I worked with her, and she has shared a million gems every since. During the mortgage process she always confronts a problem by saying, "let's put our heads together". She is truly one of the great collaborators I have ever learned from. Here are Randi's top tips for what to do during the mortgage process.
During the Mortgage Loan process
BE SURE to inform me of where your funds for down payment and closing are coming from as early in the process as you can and update with me as soon as possible. If you are lacking or short on funds that cannot be verified, this can cause delays.
Team, DO NOT apply for loans, furniture credit, auto financing, credit cards, or other accounts which may pull your credit report. Multiple pulls will most likely lower your FICO score which can change the mortgage rates and programs you qualify for.
DO NOT make excessive purchases on your credit cards. New purchases can cause your debt to income ratio to increase. Your debt to income ratio is very important for the type of loan you are qualifying for. Please wait until after closing to buy any new furniture or appliances for your new home.
Now Gang, AVOID any NSF or insufficient funds on your bank statements. The whole point of your bank statements is to verify that you have the ability to cover the funds needed for closing and that you have the ability to make your monthly mortgage payments. NSF’s or overdraft fees will kill your loan.
Oh, and partner, DO NOT make deposits other than payroll into your bank accounts that cannot be sourced and verified.
What this means: we will require a copy of the check(s) and deposit slips that match up to your deposits on your bank statements if they do not match up to your paystubs. Transfers from other accounts will also require a copy of a transfer slip, as well as a copy of the statement that the transfer originated from. People become very upset about having to document their deposits if they are not expecting this, so please be aware of it.
Why do people have to source and verify all their deposits?
Because we have to insure that:
- Another loan is not being used for this transaction
- No part of the transaction is from the seller
- All gift funds are documented
- There are no cash deposits. Cash will contaminate the account. Therefore,
Cash deposits should be avoided; they cannot be verified as coming from a legal source. So do not sell personal items or have a garage sale and deposit the money into your account, it can kill your transaction. Use cash to pay bills, buy gas or groceries and let your payroll deposits add up in your account.
IF LIQUIDATING ASSETS, a complete paper trail will be required. If you have stocks, mutual funds, retirement accounts, or other investment accounts that will be liquidated and used for the purchase of your home, we will need statements showing the current value, proof of sale or cash out, copy of transaction receipt or deposit slip, and then a new 30 day print out from the account where the money has been placed. All funds must match up on all statements throughout the transaction. Avoid the addition or subtraction of funds for other purposes during this process. If taking funds from a 401k, please provide proof that your plan allows this. Your credit report can be pulled again anytime during the process. Your scores and debts cannot change. If they do change, please let me know immediately so that I can confirm that your loan is still viable.
AND PLEASE REMEMBER: During the mortgage process you may be asked for additional items. The requests may seem redundant or excessive and your collaberation is appreciated. Securing a home loan can be a smooth process if we put our heads together, work as a team gathering all the items needed and deliver them to underwriting in a timely manner.
Copyright 2014 John Regur All Rights Reserved - Originally Posted at: Tulsa Oklahoma Mortgages - John Regur