Over the years the loan process has changed. Guidelines have become stricter and more documentation is needed to be approved.
With that in mind, as you’re going through the stages of the loan process you should know what to do – more importantly, what not to do.
Keep Your Documents in Order, Available & Close at Hand.
- Income: Underwriters typically verify your income and tax documents through employer(s), CPA, and/or IRS tax transcripts. Hold onto your new paystubs as you get them.
- Assets: Save incoming account statements – all pages. Many times a statement will show a page reading something like “Page 8 of 8 — This page left blank” KEEP THAT. As silly as it may be, your loan officer will need this to be submitted to an underwriter.
- Gifts: If you are getting any gift money from relatives, they will need to sign a gift letter (which your lender will provide) and an account statement showing the source of where the money came from.
- Current Residence: If you are renting, keep paying your rent on time and save the proof of payment. If you are rent the home you wish to buy, you may need to show sufficient equity, a lease and receipt of the first month’s rent and security deposit. If you are selling, be prepared to show your HUD-1 Settlement Statement.
Keep Your Credit Looking Pretty.
Continue to make all of your payments ON TIME. Your credit report may be pulled again and any negative changes could interfere with whether or not you get a loan and purchase a home.
Understand That Things Have Changed.
Things aren’t like they used to be. Underwriters require more documents than they have in the past. Even if what documentation is asked sounds silly, intrusive or unnecessary, they wouldn’t ask for it unless they needed it.
Apply for New Credit.
If there is a change in your credit, it may cause delays, change the terms of your financing or even prevent closing. If you must open a new credit (or even borrower against retirement funds), consult with your lender to avoid any issue that may arise.
Change Jobs During the Process.
Probationary periods, career or even status changes (like going from salaried to commission, a leave of absence or new bonus structure) can be subject to very strict rules.
Make Undocumented Deposits.
Typically this is large but in some cases, even small deposits must be sourced (unless they are already identified.) Be sure to make copies of checks and deposit slips. Keep your deposits separate and small – avoid depositing cash.
Wait to Liquidate Funds from Stocks or Retirement Accounts.
If you need to sell investments, DO IT NOW and be sure to document the transaction. Don’t take the risk that the market could move against you leaving you short of funds to close.
Ever Be Afraid to Ask Questions!
If you’re not sure about what exactly you need or what you should do, be sure you have a lender that will always be there to help you through the process and someone you can trust like our team!
If you have any questions, contact our team today and one of our mortgage professionals would be happy to discuss with you what the loan process looks like and how we can assist you.