Last time in this space, we went over some of the primary “do” areas as part of our two-part do’s and don’ts series for mortgages. Achieving a successful mortgage and home buying experience means following the right steps, but also means avoiding the proper roadblocks to accomplish a few basic things.
At City Creek Mortgage, we’re here to help whether you’re looking at a conventional mortgage, FHA loan, VA loan or another type. Today, we’ll go over the “don’t” section of this series – here are some areas you should avoid wherever possible to ensure a smooth mortgage process.
Make Big Credit Changes
As we noted in part one, credit is one of the single most important factors when it comes to getting approved for a great mortgage rate and program. We went over checking and understanding your credit in the “do” section, but one important point to be made here as well: Avoid opening or closing major lines of credit during periods where you’re looking at a mortgage.
Why? Well, because these behaviors can negatively impact your credit. This, in turn, can limit the programs you qualify for and leave you looking at worse rates than you expected.
Be Unprepared for Document Requests
Mortgage lenders have to be detailed and careful about who they lend money to, and this means getting a full picture of your finances through several different methods. We discussed being prepared for this in our first section, including having documents like your tax returns, paystubs and bank statements available and easy to access.
However, even if you’re very detailed here, be prepared for further possible requests. The underwriter may need some other document to help close the loan, for instance. Don’t be surprised or suspicious here as long as these requests come through the proper channels.
Down similar lines, expect to hear from loan professionals you’re working with regularly during the process – and be ready for this. The key to some closing situations is providing documentation and other information quickly, so this needs to be your top priority.
Make Unaccounted Deposits
When it comes to mortgages, lenders place a high priority on being able to document the source of funds you’re using for down payments, closing costs and your monthly payments. Even if you’re using gift funds, for instance, you need to be able to prove the source of these gifts.
For this reason, avoid any large cash transfers you can’t provide this proof for. Regardless of the reason, these could raise red flags and slow or even stop the process in some cases.
Go it Alone
Throughout this process, know that you have help available in every area. Our loan professionals will answer even what seems like the silliest of questions – this is one of the biggest financial commitments of your entire life, and we want you to feel comfortable and supported while taking these steps.
For more on the areas to avoid within the mortgage process, or to learn about any of our mortgage services, speak to the pros at City Creek Mortgage today.