With the real estate market doing so well in 2015 and lending institutions lending once again, make sure you follow these 8 steps when purchasing a home so that the loan approval process goes smooth all the way to the closing table.
- Don’t change your employment status. A lender will need at least 2 years of work history for your loan to be approved. If you have a salaried job don’t move to a commission job.
- Don’t make any major purchases, such as cars or furniture. Doing this can affect your debt ratio and cause the loan to no longer qualify.
- Don’t apply for a credit card, new loan, or co-sign for another loan. Applying for new accounts requires a credit rating report. Credit checks lower your credit rating, even if your rating is high. In addition, mortgage bankers have to count the new debt in the ratio, which can cause delays or change an approval to a denial.
- Don’t change bank accounts or make undisclosed deposits or withdrawals unless you have a complete paper trail.
- Don’t delay in providing all paperwork your loan officer asks for. Each step in the process has a deadline. Missing even one can cause a delay in closing and potentially put you at risk of losing the contract.
- Don’t pay off collections or charge-offs before discussing it with your loan officer. Even paying off a negative debt can cause a credit score change.
- Don’t close credit card accounts or increase credit card debt. Wait until after the loan closes to make these types of changes. Changes in credit limits and scores, even positive ones, can have negative consequences before closing.
- Don’t pay cash for home or termite inspections. To get reimbursed, you have to show more than a paper receipt. You have to show a canceled check or cashier’s check to prove payment.
Follow these 8 steps to insure a smooth real estate transaction and make your lender happy!
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