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Ellie Kravets' Blog

By Ellie Kravets, Realtor, ABR | Agent in San Francisco, CA

How to Keep Your Mortgage Approval Approved

You know how tough it is to qualify for a mortgage.

Proof you've got a long-term job with ample income. A credit score to the moon. Your life's savings as a down payment. More cash stashed away. A debt-to-income ratio to die for. For some, tax returns for the last two years.
You've been there, done that. For weeks now. Maybe a month or more.

You've fought the good fight, you've run the gauntlet of mortgage qualifications and you have your signature-tired hands on that coveted home loan approval.

Now, all you have to do is not blow it.

For goodness sake, don't make any surprise financial moves that could cost you your home loan.

Your mortgage approval is primarily based on documenting your income and assets, your equity stake or down payment, your credit and the cash you'll have left over after the deal is done.

Once you have a mortgage approval, if you change the profile of any one of those qualifiers, you could have to kiss your mortgage goodbye.

Lenders today don't just check your qualifying information once or even twice. Three, four or more checks, of one document or another, aren't out of the question in today's tight lending market.

Avoid big purchases - If you buy a new car, change the lease, or acquire another large possession, it could show up on your credit report or bank statement.

The lender could think you've gone beyond the risk the lender is willing to accept on your mortgage - especially if you qualified by a hair.

If the new loan or purchase amount upsets the debt-to-income ratio the lender used to approve your home loan, your mortgage could go "poof."

No new credit - Likewise, don't open new credit cards, even for a zero interest rate. Those credit card offers will come streaming in after you close your mortgage. Just wait. The lender didn't approve you based on the additional card or extra loan.

Pay your bills - Also, pay your bills on time, even if there's a dispute. Stop paying a bill and the blotch on your credit report can block your mortgage.

Keep your job - Be kind to your boss and don't get fired. Also, don't go looking for new work right now, unless it's a second job to make more money.

Certain job changes also can affect how the lender rates your creditworthiness.

That includes a job change between industries, a job change to start a new company and changing from a job with a salary to a job that pays by commission.

On the other hand, get a promotion and a raise and you should be fine.

Don't cash out - Leave your stashes of cash alone. Don't transfer large sums of money between bank accounts. Don't make random, undocumented deposits to or withdrawals from your bank account.

Don't be stupid – It should go without saying, but criminal activity, trying to buy a second home and trying to add a co-signer or name to the loan, after approval, could all also get your mortgage canned.

Remember, stuff happens. There are events beyond your control that could cost you your mortgage. A pink slip. A divorce. Hospitalization. The co-signer bails.

However, once your mortgage is approved, do keep tight reigns on what you can control.

by Broderick Perkins

Comments

By Kim Foemmel,  Mon Jan 14 2013, 15:23
Its really not that difficult to get a loan! There are plenty of people that can get as low as 0% down mortgages (USDA loans) and roll your closing costs in and still get a GREAT rate with average credit scores! Kim Foemmel, Hallmark Sothebys International Realty, Serviing Boston Metrowest and Beyond.
By Ellie Kravets, Realtor, ABR,  Mon Jan 14 2013, 15:42
Kim, this is info for buyers about what NOT to do when they are shopping for a home to keep their pre-approval approved! :)
Plus, in California Sellers prefer to see loans with 20% downpayment. We have very compatitive market in San Francisco, and even with 10% downpayment it's very difficult to win over other strong offers...
By Jay Sondhi,  Mon Jan 14 2013, 15:52
Great advice! I would also add "Keep your assets static". Moving money from account to account can cause some serious trouble down the road. Lenders require that you "source" all funds which can be difficult when you're moving money from account to account.
By Ellie Kravets, Realtor, ABR,  Mon Jan 14 2013, 16:01
Thank you, Jay :)
By Ellie Kravets, Realtor, ABR,  Mon Jan 21 2013, 10:44
Thank you, Torang :)
By VERREOS, Tony,  Tue Jan 29 2013, 14:16
Tough nothing new here, the advise is sound. If there were a stat to show the ratio of loans approved to loans applied for, and people who've given up after mulitple rejections, I think it would be more clear that curent lending restrictions are as unrealistic as the next to no restrictions or flat out fraud that was occurring before the mortgage melt down.

There has never been any guarantee that a potential borrower who qualifies today will remain the same essential "loan risk" at any future date. On the other end of the spectrum, the few people who are fortunate to have higher net worth than income get rejected rather than treated as preferred
borrowers. It's not just unfair, it's unintelliegent on the part of lenders.

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