When Team Rebecca is helping you get into your dream house or helping you refinance your current mortgage, we want the process to go as smoothly as possible for you. There are some things that you do NOT want to do when applying for a mortgage. For if you do, it could affect your ability to close on your new mortgage. There are always exceptions to every rule, and we know these seem like common sense but here is a good list of things you want to avoid if at all possible:
Opening New Credit/Buying a Car, Lawn Mower, Furniture, etc. – When applying for a mortgage we are looking at your debt-to-income (DTI) ratio. That means we add up all your monthly debt and divide it by your gross monthly income. If you take on more debt, for example buying a new car, buying a lawn mower, opening a new credit card, we need to count the new debt against your DTI. Taking on a $350 auto loan, could keep you from qualifying for a mortgage. We suggest you speak to your Team Rebecca Mortgage Advisor before you open any new credit cards or purchase any new major items to see how it will affect you with qualifying for that new mortgage.
Quitting Your Job or Changing Job – If we are using your income to qualify for the mortgage, you need to retain your current job. Every lender is required to do a verification of employment within 3 days of settlement. This means, we’re calling your employer to make sure you still work there. If they tell us you are no longer there, now we don’t have the income we were using to qualify you for your mortgage; thus, you cannot afford the home anymore. Also, some jobs require a 2 year history of employment, so starting a new job that is commission based pay is going to be a problem prior to settling on your mortgage.
Having Large Deposits Into Your Bank Account – All lenders have to abide by and look for anyone who is money laundering. We have to track all large deposits that are being made into your bank account. What is a large deposit? This all depends on the type of loan and your individual situation. But a good rule of thumb is 25% or more of your monthly income. If you have a large deposit, we will need a copy of the CHECK (it cannot be cash) and a letter explaining where the money is from. We will also need to track where the money came from; for example, a parent or donor’s bank account statement who is giving you the money. A large deposit from selling personal property will need a bill of sale and proof that you owned said personal property.
Spending/Lend Others Money & Co-Signing for Someone Else– You certainly do not want to lend someone money that you are going to need the day of settlement. Also, if you go and co-sign a loan for someone else, we will now have to count that debt against you when you are getting a mortgage.
Filing for Divorce or Bankruptcy – Do not file for divorce or bankruptcy during the mortgage processes. For a divorce, we will need your spouse to sign a spousal waiver, waiving all rights to the property you are purchasing. If you file for bankruptcy during the mortgage process, it will almost always guarantee that you will not close on your new loan because there is a waiting period during a bankruptcy before you can get a loan.
Withdrawing Money From Your Home Equity Loan or Line of Credit – Whether you are selling a property or refinancing, do not pull money from your home equity loan or line of credit without speaking to your mortgage advisor first. Keep in mind, any money that is pulled from the home equity will need to be paid off prior to or at settlement. If you pull money from the home equity when we are doing your loan, it is going to effect the numbers we gave you and ultimately would keep you from qualifying.
Remember, there are exceptions to every rule, but please speak with your Team Rebecca Mortgage Advisor BEFORE doing any of these things. We may tell you it is okay, but you need to go about it in a certain way so your mortgage can close on time.
To find out more information give Team Rebecca a call at 717-609-4044 or go to our website: www.RebeccaFoote.com