Mortgage Loan Borrowers Top 5 "Hiccups" & Mistakes
"Wish Lists" are a hot topic for kids, no matter the time of the year. Do you know any kid that doesn't have a list of things they're wishing for at the handy?
Did you know that Loan Officers often have Wish Lists too? I can tell you that I most definitely do.
What's at the top of my LO Wish List?
A smooth-flowing, successful mortgage process for each and every one of my borrowers.
Sadly though, hiccups and mistakes happen. Both the real estate and mortgage process are conducted by humans, so it only follows that issues arise. And it's also true that rare or unseen things can take place during a process.
But there are some hiccups and mistakes that are more commonplace or occur with more frequency. Things that with a little preparation and planning can be avoided.
Below you'll find the hiccups and mistakes that I see borrowers commit most often after they've been pre-approved for their financing to buy a home. Hopefully, by sharing them here I can help you avoid them as you move forward with your mortgage financing and home buying.
The 5 top hiccups and mistakes most commonly made by mortgage loan borrowers are:
1. Issue: Accepting a gift or check for the Earnest Money written to someone NOT named on the Real Estate Contract or the Mortgage Application
Tip: If YOU are the buyer and mortgage applicant, the Earnest Money check should be written from YOUR funds. The best way to look at the Earnest Money check is that it is an advance on your Down Payment ... or the funds you will need to Close on your loan.
Be Aware: Checks from Non-Borrowing, Non-Buying parties can cause problems!
2. Issue: Transferring monies/funds needlessly or repetitively from one bank to another ... or from one account to another (even if transferred within the same banking institution).
Misconception: That all funds needed to cover down payment and closing costs (known as "Cash to Close") must be accumulated, or deposited, to one (1) account.
Truth is: Separate accounts, separate investments, separate banks can all be verified and documented ... and their collective balances ... can be totaled to demonstrate the needed Cash to Close (funds needed for Approval/Closing).
Note: For those borrowers working hourly-paid employment, this issue is of special importance. Mortgage Underwriters look unfavorably at low year-to-date Gross Incomes reported on the most recent pay stubs required for Mortgage Application.
4. Issue: Borrowers accept "Cash" or "Gifts of Cash", then deposit it into the banking account for which the funds for Closing later get verified.
Important: Cash has NO acceptable means of being verified or counted as acceptable funds to Close by a Mortgage Underwriter.
Tip: Stop depositing cash into the accounts that you have designated and provided for Mortgage Application.
5. Issue: Borrower(s) change jobs prior to ... or after making ... application for their mortgage.
Important Advice: Do NOT change employment in any way prior to consulting with me, your Loan Officer. Consult with me, even if it's for a better job!
Why: It could matter (greatly) to a Mortgage Underwriter.
How does it matter?
- In terms of job history
- Employment length of time
- Verification of income (especially at the new position or new employment)
Remember the old saying, "It's easier to ask forgiveness than it is to get permission?"
When entering or navigating the mortgage process, that is definitely NOT TRUE.
Always ... always ... check with your Loan Officer prior to making any decision or taking any action. It's much easier, less stressful, and quicker to do things right the first time and not have to backtrack or perform "clean-up" later.
By talking to, then following the advice of your LO, you'll avoid the 5 common hiccups and mistakes listed above. And THAT is at the top of my wishlist ...
* Looking for financing answers, options, solutions, and experienced assistance?
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