|
There are so many misconceptions about what should be done or not be done while obtaining a mortgage. These are the Top Ten Misconceptions people have or do That can slow down a mortgage process and cause a loan to be declined. 1. DO NOT open a new credit card or a new loan. Even
if you can afford the new payment or can get a
"discount" by opening the credit card.
This shows up as new credit without a
history and potentially can lower your credit
score. Just
a few point differences can change what kind of
rate you qualify for.
We know you might want new furniture
and/or appliances, but please wait until you
close, before applying for any new credit.
2. DO NOT pay off collections or Charge offs. May
seem foolish, but sometimes your collections are
old, and if you make a payment on them to pay
them off, it brings them as a current account
that shows late.
Your loan officer will advise you what to
pay off and when to do it. 3. DO NOT go over your limit or come within 50% of it. Continue
to charge as normal, but don't come close to
your limit, and don’t charge more than you
normally would in a month’s cycle.
Try and keep your balance below 50% of
your limit.
Which means if you have a $1000 limit, do
not let your balance go over $500.
If you go above the 50%, credit
agencies sense you are having trouble
financially and cannot manage your money.
This is not always the case, but your
credit score is determined by a machine, and
that’s what it looks for. 4. DO NOT Consolidate your cards This
may sound like a great idea, but how it appears
to the credit agency, you have a lot of credit,
reduced it to 1 credit card, and now your
balance is at your new limit, which doesn't
allow for future charges.
Doing this WILL drop your score.
5. DO NOT Close your credit cards Pay
them down to zero, rip them up, throw them in a
drawer & don’t use them…. but don't
close them.
Keep them open.
Having credit is not bad, paying your
bills late. 6.
DO
NOT
open a new Checking or savings accounts.
Banks
want 90 days paper trails of where your money is
coming from.
It will just be harder for you to prove where your money is coming from, if it’s in multiple accounts. If you get a gift that is fine. Get a check, make a copy of it, and keep your receipts. 7.
DO
NOT change your employment Seems
silly too, but try to wait until after you buy
the house.
Many banks make you wait until you are 30
days or more on your new job with a pay stub
showing reflecting that.
If you are bettering yourself and/or
don't have a choice, of course, change your job,
but expect delays in your approval.
Banks will call for verification of
employment the day you are closing.
8.
DO
NOT Deposit Cash Unfortunately
cash is not accepted in a purchase transaction.
Sounds silly, and people sometimes think
if you have a bunch of cash that’s a good
thing. It’s
not banks still need the paper trail and you
can't prove where you got cash from.
So if you sell something, make sure you
have a bill of sale and get a check for it.
If you get a gift from a family member,
make sure it’s a check and you deposit it.
Unexplainable large cash deposits are
unacceptable. 9.
DO
Pay your bills on time Many
people think they will hold off on paying stuff
until after they
close
on a house.
DON’T DO THAT.
New credit reports are pulled
right
before closing to make sure everything is up to
date, and no new credit has been taken out. 10.
DO
Listen to your loan officer! Mortgage
loans have changed dramatically in the past 2
years. What
someone may
have been able to do a few years ago, doesn't
work anymore.
Sometimes what a bank asks for may seem
unreasonable, however banks are cautious to lend
money in the current environment, and extra
steps may be required for approval.
LA
Mortgage has an experienced staff of mortgage
professionals with over 100 years of combined
experience in the mortgage industry.
When you are looking for a Mortgage….Look for LA! |