6 Things To Avoid While Waiting For A Mortgage Approval
When buying a home, there are two stages in the home loan approval process.Stage 1 starts when a homebuyer submits a mortgage application to his loan officer for a pre-approval.
Preapproval is an initial home mortgage approval. When this is requested, It indicates that the loan is likely to be approved for a predetermined down payment and purchase price.
This preliminary approval will not matter once the application goes to review for the actual mortgage loan. Stage 1 ends when the “underwriter”, not the loan officer becomes involved.
It is the job of the “underwriter” to make sure that the buyer can meet the lending criteria of the banking institution. He does this by reviewing the buyer’s credit, assets, income, job history and other factors. This is Stage 2.
This procedure should be a formality if the Stage 1 loan officer did an appropriate job. Usually this stage moves along as anticipated. However, sometimes the buyer changes his loan “risk” without intending to do this, but affecting the mortgage approval. The buyer doesn’t mean to decrease his loan probability, it “happens.”
It is important for the buyer to maintain a consistent “risk profile”. The following is the “DO NOT DO” list of 6 activities for a buyer to avoid during the period between Stage 1 and Stage 2 of the mortgage loan process:
1. Don’t buy a new car (or take on a larger lease payment) 2. Don’t quit your job or change industries (and certainly don’t switch to a heavily commissioned role) 3. Don’t transfer large sums of money into or out from your bank accounts (and remember that “large” is relative) 4. Don’t miss a payment to a creditor (even if you don’t think you owe it) 5. Don’t open a new credit card (even if you’re getting 10% off your new bedding) 6. Don’t accept a cash gift without talking to your loan officer first (because there’s rules on how to accept them)
There may be some other “don’ts” but this is a good starter list. It may not be possible to avoid some errors. Talk to your loan officer if you have to break a “rule.” You need to have professional guidance during this process because There are a lot of “snafus” possible during the process.
