The last thing you want after being approved for a home loan is to find out your financing has fallen through. Once you are approved for a home loan you should basically freeze your finances and not do anything more until you close on your home loan. Too many frustrated and disappointed buyers have had their financing fall through because they’ve made some poor choices or just made some financial moves that they had no idea were detrimental to the mortgage process. Here are seven ways not to lose your mortgage.
#1. Keep your job.
Don’t start a new job and don’t quit once you have started the mortgage process. Your income needs to remain stable. If you change positions within the same industry or office and your income is not affected, that’s usually all right but don’t make any major changes with your job or occupation until after you close. Also, keep the steady paycheck coming in and make sure your paychecks are somewhat stable and consistent. Even self-employed borrowers can provide bank statements showing approximately how much money comes in each month. If there’s any major variance from one month to another, you may need to supply a letter of explanation.
#2. Keep your bills current.
Try not to get any strikes against any payments you have going on right now. Make sure your utility payments, medical bills, car loans, and rental payments are all up to date and current. Lenders will be checking your credit throughout the process to make sure your finances are stable.
#3. Do not apply for any new credits.
I know it can be exciting to plan and maybe even purchase new furniture for your house, but do nothing, especially on credit or make any large purchases once the mortgage process is underway. Wait until everything closes and you move in before buying anything big or applying for any credit or credit cards.
#4. Make sure you have your gift paperwork filled out.
If you are getting a gift as a down payment or any money gifted to you for the purchase of the home make sure you have the paperwork completed. You can only use gift money on primary residences and second homes and the gift letter needs to explain that the money is a gift and not a loan that will need to be paid back. The letter should include the donor’s name, address, phone number, relationship to the borrower, the dollar amount, the date the funds were transferred, a statement from the donor that saying repayment is not expected, the address of the property being purchased and the donor signature.
#5. Don’t cancel any credit cards.
Lenders look at your debt to income ratio so if you cancel a credit card that had no balance but had a $10,000 limit, instantly the amount of debt you have versus the amount of available credit increased dramatically. Don’t cancel any loans or credit cards and don’t apply for any new ones until closing.
Your lender will usually tell you what to do and not to do once you are approved for a home loan. You certainly don’t want to risk losing your loan now. If you’d like to speak to a lender in our area, give me a call! I’ve worked with several reputable and reliable lenders in the Mesa area.