We all hear and see that the market is slowly getting better, rates are low, people are taking more time to educate themselves and learn more about the process of acquiring a home loan.
Banks are still very cautious and guidelines are definitely changing everyday and are tighter than they used to be BUT this does not mean it is impossible to get loan approval it just means a little more paperwork and documentation.
People need to know this is not only for the banks to be more secure on whom they are lending to but also it helps protect the buyers. I came across a great article on MSN Real Estate that listed 4 problems that could ruin your mortgage approval. It lays out four tips to ensure you home purchase goes smoothly. This article was very well written and laid out some very serious advice. These tips are some of the exact things I strongly address with my clients, now a couple of them I consider as one, such as avoiding any major credit card purchases and prepare for a last-minute credit check, so my list is only 3 items, see below.
· Avoid any major purchased before closing your mortgage loan. Most buyers assume that just because all is clear to close and everything is ready that the deal is done. Unfortunately this is not true, if you are doing a conventional loan, a lender and/or bank is REQUIRED to do a credit pull 10 days prior to closing. So if you have added debt to your credit this could change your whole approval. Now in this article it states to avoid the big purchases until after you have signed the dotted line. I always suggest to not doing any big purchase items until at least 30 days AFTER closing. Some investors will check your credit days after closing. This could prevent your loan from being purchased by the investor/bank.
· Don’t make any big career changes. For every loan the lender is required to do a “verbal” verification of employment 5-10 days prior to closing. If you have changed positions, jobs, etc your verbal could come back as “not employed”! This will prevent you from closing! At best you can save the deal ONLY if you push your closing back at least 60 days! And will have to go through the approval process all over again.
· Watch out for closing-cost surprises. Most homebuyers are using every last penny they have to put into their down payment. This can be a huge mistake, because sometimes there can be last minute costs that will surprise you, example, an overdue HOA, an additional title search, a Good Faith Estimate (GFE) is exactly what it is, an “estimate”. There can always be an additional amount or if you’re lucky, less. So just be prepared to save a little extra.
For the full article, which I highly suggest, click here.
If you would like to complete an online loan application, click here. And as always if you have any questions please don’t hesitate to call and/or email me.
Cheers~
Ray Williams
Branch Manager
Summit Mortgage Corporation
303-779-0591 ext. 101
