You have submitted a mortgage application, found your dream home, and put in an offer. Now what? Applying for a home loan is an ongoing process, from application to closing, that does not have to be stressful. There are several things you can do to make the process more efficient, and things not to do to avoid delaying your closing or changing the status of your approval. Below is a list of recommendations to make sure that this exciting journey progresses as smoothly as possible, all the way up to the day you receive your keys.
DO:
Pay bills on time
Remember to stay current on your existing accounts. Set reminders for yourself or place bills on autopay to avoid late payments, as they could cause a delay in your closing.
Postpone career moves until after closing
Your approval is based on your current employment and income, and both need to be verified. Making career changes, regardless of the compensation, will make the verifications obsolete and cause the loan file to repeat the underwriting step. Of course, there are instances where you may not be able to control these changes. If you are considering a job change or experience an unexpected job change, give us a call.
Keep financial documents available
We try to collect everything up front, however, our Underwriting team may request additional documentation. We recommend that you keep your financial records easily accessible until after closing.
Save your income statements
Keep all current and upcoming income statements. There will be additional verbal verifications with your employer and your CPA, and verification of your IRS tax transcripts. Everything will need to match, so hang onto your incoming paystubs, as they may need to be updated by your underwriter.
Save all pages of your bank statements
These pages may need to be updated, so be sure to keep upcoming bank statements available. This applies to all checking and savings accounts, along with any brokerage and retirement accounts.
DO NOT:
Make any large purchases (such as a boat or car)
Similar to the way a new credit card or credit inquiry can prevent us from being able to close your loan, making a large purchase before your closing can delay your move-in date. If you must make a large purchase, give us a call first to determine what kind of impact it could have.
Make any unusually large deposits
Money used for a down payment on your home may not be borrowed money, and you will need proof that large deposits are not borrowed funds. A large deposit is defined as any amount greater than 25% of any one borrower’s monthly net income deposit.
Close credit card accounts
Closing a credit card will reduce your total amount of available credit, impacting your credit score. New credit can bring your credit score down as well, so it’s best to postpone opening any new credit accounts until after closing. (see the next Do Not)
Apply for new credit
New credit inquiries can have a negative impact on your credit score and your debt-to-income ratio. Any changes can create delays, change the terms of your loan, or cause your loan to be denied, in some cases. If you must open a new account, consult with us first, and we will analyze and properly document the impact.
Be afraid to ask questions
If you are uncertain about what you need to do, or which steps you should take, we at Benchmark are here to help you through the process. Together, we can work towards a truly great experience purchasing your brand new home!
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