We aim to provide the absolute best client experience with every loan. To ensure your loan experience goes as smooth as possible, here are some helpful tips on things to avoid during the process:
1. Changing jobs, becoming self-employed, or quitting your job before applying for a home loan | You want to show lenders stability. While a job change could mean higher income, it could lead to obstacles when confirming your pay and length of employment.
2. Switching banks | Like your employment, your banking history should exemplify stability.
3. Making large purchases requiring financing i.e. cars, furniture, and jewelry | You may feel that a new car would be an enticing addition to your new driveway, or that you NEED the new sofa you’ve been admiring. Wait! Resist the feeling and avoid impacting your debt-to-income ratio.
4. Opening a new line of credit | Lines of credit are seen as potential liabilities. Eliminate any cause for concern, and in doing so, make the process easier and quicker for everyone.
5. Late payments or excessive charges | It is important to create and maintain a track record of responsibility and show that you can effectively manage money. One of the most important elements of your credit score is your history of on-time, in-full payments.
6. Making large deposits into your bank accounts | The money set aside for your down payment should be in your account for at least two months prior to applying. If you transfer funds keep an accurate paper trail. Your most recent bank statements will be required before closing.
7. Providing inaccurate information on your loan application | Obvious, right? But remember not to leave out any debts or liabilities, and do not fabricate your income. It’s illegal.
8. Co-signing a loan | Even if you’re not making the payments, it will impact your debt-to-income ratio.
9. Originating credit inquiries | Looking for new credit translates to higher risk. As mentioned earlier, opening additional credit lines represents risk and your eligibility could be hindered.
10. Spending your savings | You’ll need funds for a down payment and closing costs. Your reserves may require further verification to ensure stability. You’ll need to exhibit that you have cash available should you need it to pay the monthly mortgage in the event of job loss, or unforeseen large expenditures. Keep intact any savings you had when you qualified until after you close.
No matter how hard it is at this overwhelmingly exciting time, it’s better to be patient; opportunities will still be there after you close! Good luck!