Things you Should (and Shouldn’t) Do During Home Loan Process

Though I am not a mortgage person, I work closely with lenders and mortgage officers to ensure my clients are informed and educated.  There are definitely some things to do as well as some things NOT to do, that will help make the mortgage process smooth and stress-free.

If you are seriously considering a home purchase and require financing, one of the very first things you should do is speak with a mortgage officer about what your options are. They will discuss your individual needs and circumstances as well as give you your very best loan options. Based on many things to include your credit score, credit history, income, and ratios, they will either tell you what you need to work on to become eligible for a home loan or provide a pre-qualification letter right then and there. 

Once you have that letter in hand, there are things you will need to do to become completely approved for the loan.  Though I recommend working with a knowledgeable and professional  mortgage person with excellent communication skills, (happy to recommend) I can point out a few important items that can make a world of difference in the outcome of the loan process.

1:  Before and after getting your pre-approval, continue to pay your bills on time.

2: Don't make any changes that will negatively affect your credit score or ratios.

3: Don't make any changes that will negatively affect your income.

4: Do get all of the requested documentation your lender requests back to him/her in a timely manner. 

Before and During the Loan Process, make sure you check with your lender BEFORE you do any of the following:

  • Before  you acquire new credit. Everyone's situation is different but whether it's a large or small purchase with new credit, check with your lender. Even allowing a cashier to run your credit to get a store card that you don't plan on using can affect your credit score.  

  • Before you use existing credit. If you are pre-approved for a loan and decide you are going to buy furniture for the new house before closing, there may not be a closing. Even if you use an existing card with a credit limit your lender knows about. Before using existing credit, check with your lender that it does not throw off your ratios.   

  • Before you pay off existing credit. What could be the harm in this?  Trust me!  Ask your lender before you do it just to be on the safe side. Ask him/her about anything new or in question that involves credit. 

  • Don't buy a new car during the home mortgage process! At least without discussing with your mortgage officer or lender. 

Don't quit or change jobs right before or during the home mortgage process without discussing with your lender. Even if the new job is 'better' or pays better.

 Here are a few more things to ask before doing: 

  • Check with your lender before making a large or unusual deposit.

  • Check with your lender before transferring funds from one account to another.

  • If you plan on using money that's gifted from a relative for your down payment make sure the lender knows this upfront. Depending on your loan, this can be acceptable but it has to be handled a certain way. 

Lending laws are a bit stricter than in years of past, and that's not necessarily a bad thing. There are rules and guidelines in place to protect buyers and prevent risky loans that aren't good for a healthy housing market. If you don't know what to expect you can make costly mistakes or be stressed out for the entire process. 

 Even if you have gotten a loan in the past, the process may be a little different than you recall.  Find a mortgage officer or lender who will help you find your best loan options, educate you on the procedure, and communicate with you throughout.  I am happy to recommend one of my excellent preferred lenders who do just that and as always, I'm here to help with any of your real estate questions or real estate needs. 

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