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What to Do and What to Avoid Before Your Mortgage Closes

So you have got a pre-approval mortgage. That’s a great thing, however, it does not mean that you can now stop monitoring your credit. Whether you are refinancing your existing home or buying new property, you must not do anything that affects the validity of your pre-approval letter.

Before making any substantial changes to your credit history, you should seek the advice of your loan originator. Keep in mind that even seemingly beneficial moves can affect your loan eligibility.

If you want your pre-approval to remain valid, you should pay attention to the following do’s and don’ts.

Do’s

  • Provide proper documentation for the sale of your personal items. These include the closing statement and sales contract etc. Make sure you keep all the original documents and have easy access to your paystubs, important financial documents, and bank statements etc.
  • Keep a close watch on your credit report. Provide the Earnest Money Deposit from your personal bank account or an acceptable gift fund.
  • Inform your loan officer if your employment status changes. For example, you may have received a promotion or a raise. You should also notify the loan officer if there is a loss of income.
  • If the loan approval depends on your employment income, you should stay employed. You should pay your bills on time and also make timely payments on your existing debt obligations, including current mortgage, car, or student loans.

Don’ts

  • Don’t change jobs without considering what impact it will have on your pre-approved Manhattan home loans.
  • Don’t buy expensive items like cars, appliances, or furniture during closing. Major purchases can change your qualification ratio and affect your chances of obtaining home mortgage loans.
  • Don’t deposit or obtain a large amount of money ($500 or more) without notifying the loan officer. According to the FNMA/HUD guidelines, you have to prove the sources of these funds.
  • Don’t open, close, or transfer asset accounts before inquiring about the documentation required.
  • Don’t increase your financial liabilities before the loan closes.

It’s important to inform your loan officer if you’re gaining or losing money somewhere. For example, if you received a huge cash gift from a friend or family, you should report it to your loan officer. Also, if you are planning to change your address or phone number, make sure to give the new details to the loan officer.

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