Unfortunately some would-be borrowers neglect their finances in the excitement of shopping for a home. The lender may do a renewal letter to recheck all financial commitments after the initial 90-day approval period.
The well-versed agents at Orange Key Realty can partner with you through this process, with little to no glitches.
Don’t apply for new credit.
Mortgage lenders must do a second credit check before a final loan approval. Your credit score may change, which may mean that your interest rate must be adjusted.
Don’t make any major purchases.
If you buy furniture or appliances with credit, your lender will need to factor in the payments to your debt-to-income ratio, which could result in a canceled or delayed settlement. Pay cash, or wait until purchase completion.
Don’t pay off all your debt.
Even if you pay off your credit card debt, it can hurt you if you close out accounts or reduce cash reserves. The lender needs to know where the money came from.
Don’t co-sign any loan.
A loan is considered a debt for both signers. Providing 12 months of cancelled checks showing the co-signer is paying the debt allows a lender to move forward and payments on a newer loan are calculated as part of your debt-to-income ratio. Don’t change jobs. Try not to change jobs after preapproval. Verification will be necessary, which could delay your settlement.
Don’t ignore any lender requests.
“You should provide all documents as soon as they are requested. Delaying could potentially delay your settlement,” states Ofir Hillel, broker/owner of Orange Key Realty.
Stay current on your existing accounts.
Your preapproval is a snapshot in time, and you want to make sure your finances stay as close to that as possible.
Keep a paper trail of all deposits.
Make sure you document everything and are proactive by contacting your lender if you receive a bonus or if cashing in your CD’s. A good lender will advise on what you’ll need for a paper trail.
Discuss seller concessions.
Michael Matthews, broker/owner of Orange Key Realty says, “Your lender needs to know if you are intending to ask for seller concessions so that they can be factored into the loan approval.”
Orange Key Realty’s staff of Sales and Broker Associates can be reached at either 863 Georges Road, Monmouth Junction, (732-297-6969) serving Middlesex County, and 60 E. Main St., Freehold, (732-863-6969) serving Monmouth County or www.orangekeyrealty.com.