DOs and DON’T to Make sure Your Loan Closes!
The information was presented at a recent workshop with Adam Moore our fabulous and knowledgeable mortgage specialist with N E Moves Mortgage, LLC an Affiliate of Coldwell Banker Residential Brokerage
Do NOT apply for new credit!
- Credit inquiries can affect your FICO score
- Documentation will be needed to explain all new credit inquiries
- Documentation will be needed to verify any new accounts you have opened. (Not only adding more time to the process, but creating potential issues in qualifying the loan.)
Do NOT increase credit/loan balance
- Increased minimum payments can increase your DTI (Debt to Income)
- Increased credit balances can lower your FICO score
- A credit pull prior to closing could reveal these new balances and potentially cause your loan to be denied!
- Keep your financial picture EXACTLY the same as when you originally qualified for the loan.
Do NOT close credit cards or payoff loans
- This may seem counter-intuitive, but closing a credit card account can actually hurt your FICO score.
- The more revolving credit, the better the score (Paid on time balances of course. A balance of $1 to 20% of your limit is the best for high credit scores.)
- Do NOT dispute any accounts on your credit report while your loan is in process (Disputes need to be resolved and an updated credit report will need to be requested from the credit bureaus. Again, adding time and complexity to closing the loan.)
Do NOT change jobs or lose your job
- It’s undoubtedly no surprise to you that job loss will affect your loan. However, did you know it actually immediately cancels your loan approval? (Underwriters will confirm your employment just prior to closing.)
- Job change – within same line of work (If you have a salaried position, you will need 1-2 paystubs before the loan can close. If you receive an hourly wage, you will need proof of set hourly schedule plus paystubs.)
- Job Change – new line of work is very risky for a loan approval, the impact will depend on many factors.
Do NOT make large deposits
- All large deposits must be sourced (traceable) and explained (This process can add lots of time to the loan process. Underwriters will request bank statements up to closing.)
- Cash deposits are NEVER acceptable (Written explanation is required and the funds can NOT be used.
- Certain mortgage programs block the use of such funds in that account!
DO disclose everything upfront
Tell your mortgage specialist:
- if you have been divorced. (Child support, alimony, etc. can affect your loan qualification.)
- about any other properties you own (They need to obligate you for housing expenses and they will find out! Omissions in disclosure simply prolong the process and put your loan at risk.)
- about any undisclosed liabilities (Monthly payments you owe to a person/creditor which doesn’t appear on your credit report.)
DO cooperate with every request
Remember your mortgage specialist is working very hard on your behalf! They don’t make up the guidelines. They wouldn’t ask for information if they didn’t need it to secure your loan. The more you petition their requests, the longer it will take to close. HELP ease the process of closing your loan by providing all requested documentation in a timely manner.
If you would like more information contact Adam directly and tell him Saturday Socks sent you! ; )
Senior Loan Officer – NMLS ID #156393
NE Moves Mortgage, LLC
Cell Phone: (978) 697-6019
Secure Fax: (781) 663-6667