Course 11 – Unit 3: Avoiding Bad Mortgage Behaviors

Avoiding Bad Mortgage Behaviors

Here are 8 things you should absolutely not do between the date of your application and the date of your funding. Any one of these could force a revocation of your mortgage approval. Ignore these rules at your own peril.

1. Don’t buy a new car or trade-up to a bigger lease

2. Don’t quit your job to change industries or start a new company

3. Don’t switch from a salaried job to a heavily-commissioned job

4. Don’t transfer large sums of money between bank accounts

5. Don’t forget to pay your bills — even the ones in dispute

6. Don’t open new credit cards — even if you are getting 20% off

7. Don’t accept a cash gift without filing the proper gift paperwork

8. Don’t make random, undocumented deposits into your bank account

You may find it 100% impractical to follow these rules to the letter. For example, if your car lease is expiring, you have to do what you have to do. Renew the lease. Before doing it, though, check with your loan officer. Don’t keep secrets from your loan officer. Your loan officer is like your priest. You can confess anything that he/she needs to know, so they can get forgiveness, meaning… .they can plan for and even make adjustments for anything that happens that may impend or change your loan approval. After all, your loan officer is a licensed professional, with years of experience and training and knows how to handle life’s situations that may delay or even negatively affect your loan approval.

Why you don’t want to keep secrets…………..

Once you receive a final loan approval, a few days before the lender issues a (CTC) clear to close, the lender will pull your credit again, check again with your current employer, and confirm that your income has not changed, that you remain employed, and that your monthly payments on your credit report have not changed. In other words… the lender checks up on you again. Your profile has to remain the same, no changes with employment, income or debts. Otherwise, your loan could be withdrawn, or be impacted resulting in higher cost, more down payment, change in interest rate.

The same goes for accepting cash gift from parents.

There is right way and a wrong way to accept a cash gift for a purchase and if you do it the wrong way, your lender may disallow the gift and deny the loan. Again, communicate with your loan officer.

These are just 8 of the behaviors which could sabotage your loan. There are more, of course, and a lender will help you identify them. Again, no secrets from your lender. Tell your loan officer of any changes in your personal life that may affect the original loan approval. It is better it comes from you in advance, so problems can be corrected.

Technology and loan verification processes exist in the mortgage industry that are designed to locate and verify pertinent facts; and this process picks up any changes in a loan applicants financial posture, just before closing.