Eight tips to make things easier...
Frank Merola is Executive Mortgage Banker for William Raveis Mortgage LLC.
To help you reach your goals of homeownership here are some common “do’s and don’ts” of getting a mortgage. There have been many situations where a buyer is literally weeks or days away from obtaining the keys to their dream home and all of a sudden, they get a call from their bank or lender about a problem or issue where they can’t close on the loan.
These tips will help you try to avoid that.
- Don’t change jobs, quit your job or become self-employed. Changing jobs is the only one you may be able to overcome but only if your new guaranteed salary is similar to your old one. Quitting your job to seek another one or changing from being an employee (w2) to 1099 (self-employed) is a definite deal breaker.
- Try not to take on major installment debt such as car loans, furniture loans or student loans. These monthly payments will be added to your debt to income and could put you “over the line” of what your approved for?
- Try not to use credit cards excessively or fall behind on any payments. Falling behind on payments can put you into collections and jeopardize your chances of buying that dream home.
- Do not spend money you have set aside to buy your home. Do not use other people’s money unless you can document it as a gift. Lenders will want to see that a borrower has their own “cash to close” a transaction through the entire process of getting approved for a mortgage.
- Do not omit liabilities or debts from your mortgage application. Things like child support, alimony and other debts that do not show up on credit reports are often discovered elsewhere in the mortgage process and if omitted they can become problematic.
- Avoid large deposits. I guess the saying goes you can never have enough large deposits but when purchasing a home, you want to avoid them. You will have to source and explain most deposits that are over $1000 or above a certain percentage of your income. It is best to wait to sell large ticket items or move money around until after the closing.
- Do not co-sign for anyone. Even though you are doing someone a favor like co-signing for a relative’s car loan, ultimately the debt is reported to the credit bureau and you are responsible if the other party does not pay the bill.
- Do not fall behind on your lenders request for additional documentation. When buying a home there is normally a large sum of the buyers Downpayment held in escrow and these funds can be jeopardized if a buyer is not able to obtain a mortgage commitment prior to closing.
Feel free to reach out to me via phone or email if you have any questions or comments.
Executive Mortgage Banker
NMLS Mortgage Loan Originator ID: 1020051
William Raveis Mortgage LLC NMLS ID #2630
Email [email protected]