Mortgage “Do’s” and “Don’ts”

Throughout the mortgage process, there are certain things that all homebuyers should keep in mind. Here are some of the biggest to-do’s and not-to-do’s for your clients when searching for the best mortgage loan option!

Do’s

  1. Do Stay Current on Existing Accounts
    Like your mortgage and car payments, one 30-day late notice will cost you.
  2. Do Keep All Documents
    Keep all documentation on any deposits made into your accounts. Keep copies of earnest money deposits.
  3. Do continue to Use Your Credit as Normal
    Red flags are raised easily with the credit scoring system. If it appears that you are changing your pattern, it will raise a red flag and your score will go down.
  4. Do Keep Your Originals
    Please send us updated pay stubs and bank statements if our current copies are over 30 days old prior to closing.
  5. Do Provide Documentation for the Sale of Your Current Home
    We will need a copy of your sales contract and closing statement (aka HUD-1 settlement statement/Closing Disclosure) and documentation of your proceeds.
  6. Do Contact Us if Your Employment or Marital Status Changes
    If you change employment, get a raise, or have a leave of absence we need to know. If you get married, notify us.

Don’ts

  1. Don’t Apply for New Credit of Any Kind
    If you do that company will pull your credit report and this can have an adverse effect on your credit score. Likewise, don’t establish new lines of credit for furniture, appliances, computers, etc.
  2. Don’t Pay Off Collections of Charge Offs
    Unless you are specifically asked to in order to secure your new loan. Generally, paying off old collections causes a drop in your credit score.
  3. Don’t Close Credit Card Accounts
    If you close accounts, it can affect your ratio of debt to available credit, which has a substantial impact on your credit score.
  4. Don’t Make Any Adjustments or Transfers In Your Assets
    Don’t change investments, close accounts, open new accounts, or substantially change your asset picture without contacting us first.
  5. Don’t Make Large Unexplainable Deposits Into Bank Accounts
    Any non-payroll deposits will need to be explained and documented for underwriting. Cash deposits cannot be used.
  6. Don’t Make Changes to Your Employment
    Employment stability is a big factor in the underwriting process. Quitting or changing jobs can endanger your loan approval.
Richard-REALTOR®