Bad Mortgage Behavior: Things To Avoid While Your Mortgage Application Is In-Process

By Todd Abelson NMLS #180858 on .

Your mortgage lender just called with great news! They have pulled your credit, reviewed your income documents, and checked out your assets. Your loan has been pre-approved, and they promise you will close on your purchase or refinance within 30 days!

You are officially in the clear now. There is nothing else you have to do except count down the days until closing, right?

Wrong.

The first thing to understand is the difference between an “pre-approval” and a “clear to close.” A pre-approval is what a lender gives you after an initial review. It simply means that based on your credit history and scores, monthly debts, income, employment, and estimated home value, and you meet their program guidelines. A clear to close comes after an underwriter conducts a much more thorough review of your qualifications and documentation. It is the magic ticket to closing your loan.

Unfortunately, there are several ways that a borrower can keep his “approved” loan from ever closing. Here are the most common:

Taking On Additional Debt. Your credit is actually pulled twice when you apply for a mortgage. Once for the initial pre-approval and once immediately before closing. If the underwriter sees additional debt on the second pull, that is a huge red flag which can kill your deal. Don’t buy a new car, sign up for a department store card, or buy new furniture on buy-now-pay-later 0% interest terms no matter how good the deal sounds.

Changing Your Employment Status. Remember that your loan was pre-approved based upon your current employment and pay status. If you quit your job or change your compensation structure before closing, not only does it render your initial approval meaningless, but it makes your employment situation appear unstable to the underwriter. Save any career changes for after closing.

Missing Bill Payments. If a late payment shows up on your credit report right before closing, the underwriter will justifiably wonder how you will pay your mortgage when you can’t make your car or credit card payment on time.

Not Sourcing Bank Deposits. Underwriters want to be able to document where every penny in your bank account came from. Between approval and closing is not the time to finally deposit that $2,000 in emergency cash you’ve had stashed under your rug. The reasons? They want to make sure there are no new debts which need to be accounted for, or that the funds did not come from a party to the transaction.

Need guidance through the complicated world of mortgage and real estate? Don’t hesitate to contact Todd Abelson at Tucson Mortgages, the experts on Tucson mortgage rates.

Single Women and Homeownership

By anchorwave on .

This infographic shows the differences between single men and women home buyers, and the findings might surprise you! One quarter of women spend more than half of their annual income on housing costs!single women

Home Prices over 30 Years

By Todd Abelson NMLS #180858 on .

How have home prices changed over the past 30 years? How will trends likely continue into the future? Average annual appreciation percentage is shown in this easy to read infographic from Tucson Mortgages.

BubblePrices