Tips for a Smooth Loan Approval

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“My wife and I always wanted a toy. My wife is at a conference in Vegas and I’m at the Mercedes dealership.  I found a car I am in love with and the salesman said the $1,000 per month payment wouldn’t affect our ability to buy our new home.” This was about a week before they were scheduled to close on their home. They wouldn’t be living in their dream home if he hadn’t called me.

One of the factors an underwriters considers is your “debt to income” or DTI ratios. The first of these is your proposed housing payment. This includes principle, interest, taxes, insurance, and HOA fees. The second ratio is your total long-term debt. This includes your house payment, and minimum payments on any long-term debt. Included are credit cards, car loans, school loans, etc.

When you apply for a mortgage, you agree to disclose any new debt. Immediately prior to funding your loan, the funder will re-verify your employment and re-pull your credit. If the DTI increases, the loan may need to be re-underwritten and you may no longer qualify.  The new car payment would have been the kiss of death for the mortgage on their new home.

Here is a list of tips to help ensure an effortless loan process and help you avoid any delays in your loan approval.

 

  • DO continue to make your mortgage or rent payments on time
  • DO stay current on all existing accounts
  • DO keep working at your current employer
  • DO keep your same insurance company
  • DO continue living at your current residence
  • DO continue to use your credit cards as normal
  • DO call us if you have any questions 
  • DO NOT make any employment or income changes
  • DO NOT make any major purchases (car, boat, jewelry, fur, etc)
  • DO NOT apply for a new credit card (even if you are pre-approved)
  • DO NOT open any new credit card
  • DO NOT transfer any balances from one account to another
  • DO NOT pay charged off balances without first discussing it with us first
  • DO NOT pay collection accounts without first discussing it with us first
  • DO NOT buy any new furniture
  • DO NOT close any credit accounts
  • DO NOT change bank accounts
  • DO NOT max out or go over the credit limit on any credit card accounts
  • DO NOT consolidate your debt onto 1 or 2 credit cards
  • DO NOT take out a new loan
  • DO NOT start any home improvement projects
  • DO NOT finance any elective medical procedures
  • DO NOT open a new cellular phone account
  • DO NOT join a new fitness club
  • DO NOT pay off any loans or credit cards without discussing with us first

If you encounter any special situation that could affect your credit, it is best to discuss it with us immediately so that we can help determine the best way to help you achieve your goals.

If you are considering purchasing or refinancing a home, call me at (775) 828-7006. Lets discuss your questions and concerns and avoid the mistakes that could sabotage your mortgage.