You've fallen for a home, been pre-approved for a home loan - maybe with conditions, maybe not - either way, you're feeling pretty good about the upcoming close of your loan. What you may not realize is that credit and employment are verified again at the end of the application process before the commitment is issued. If your situation should suddenly change prior to the lender issuing a commitment letter for closing, you risk causing delays or putting your loan in jeopardy.
If your loan hasn't closed you may be in varying stages of the mortgage process during which your information is reviewed, verified, reviewed and verified again. While you wait for the financial commitment, there are 4 things you'll want to avoid to help ensure smooth sailing all the way to the closing table:
- Making Large Purchases - From furniture, to a new car or boat, you'll want to avoid making any large purchases prior to closing. Remember your credit is verified just days before closing, and any purchases on credit could alter the Debt to Income ratios that were used to by the lender to determine your ability to make on-time payments.
Avoid Changing Jobs - A change in employment might mean a change in income which could affect the qualifying ratios mentioned earlier. Even if the new job offers more income it would need to be verified and reviewed against the loan guidelines which would cause delays.
Opening or Closing Credit Accounts - Opening or closing accounts after the application has been taken is generally frowned up by lenders because doing so can grossly affect scores, and FICO scores are an important indicator used to determine a borrower's qualification.
- Making Large Deposits - During the application process, lenders request copies of bank statements, verify accuracy of statements, and source funds or research the original source of monies used for down payments and gifts. Making large deposits of income that has not been verified, or sourced by your lender would result in a red flag and could cause delays in getting your loan to close.
Please Note: This article is provided for illustrative purposes only. It is not an offer or commitment to lend money, and it is not an advertisement for a specific mortgage or a specific interest rate. Contact me to run the numbers for your situation.
How Can I Help You?
As a mortgage loan officer with Jersey Mortgage Company, I can assist borrowers in New Jersey, Connecticut, Florida and Pennsylvania with getting pre-qualified for a home loan.
By offering information and educating clients on the mortgage loan process and servicing each borrower's individual needs, and partnering with Realtors to create a seamless transaction, I am able to exceed expectations and ensure that deals are closed on time!
By Nik Rivers