04/06/2022: Home Loan Process – Do’s & Don’ts List

While working through the loan process, there are things you can do to delay your loan closing or even disqualify you from getting the loan. Here are some things to be aware of:

  • DO notify your lender if you plan to receive gift funds.
  • DO notify your lender immediately of any potential employment changes (i.e., change of employer; recent raise/promotion; change of pay status, such as salary to commission, etc.)
  • DO notify your lender immediately of any changes in marital status.
  • DO stay current on all existing account payments, including mortgages, car loans, student loans, etc.
  • DO continue using your credit as usual. Changing credit behavior may negatively affect your credit score.
  • DO keep all documents related to deposits, paystubs, current home sale, etc. Your lender may request additional documentation during the process for verification; having these records readily available will expedite the process.

 

  • DO NOT change jobs/ employer without inquiring about the impact this change would have on the approval/ approvability of your mortgage loan.
  • DO NOT make major purchases prior to closing (i.e., new car, furniture, appliances, electronics, etc.) as this may impact your qualification ratios. Please contact your lender to calculate what your new ratios would be with any additional debt.
  • DO NOT deposit unusually large sums of money without notifying your lender. Conventional and Government guidelines require documentation to source large deposits (i.e., copy of bonus check, copy of tax refund, copy of insurance settlement, gift letter with copy of a check and deposit slip, etc.)
  • DO NOT apply for, open or increase any credit cards, signature loans, etc., during the loan process. The company may pull your credit report and adversely affect your credit score.
  • DO NOT close any credit card accounts. This can significantly impact your debt to available credit ratio and lower your score.
  • DO NOT pay off collections associated with your credit score UNLESS specifically asked to by your lender. Doing so may actually adversely affect your credit score.

We want you to feel comfortable and educated during the home loan process.  If you have any questions or concerns, please let us know.

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