Are Your Safe from Yourself?? Home Buyers Sabotage their Own Loan!
What you don't know can hurt you when it comes to getting a loan to buy your next home. For all the talk of how tough it is to be "mortgage approved", the basics of mortgages haven't changed. Mortgage approvals are still the 3-legged stool of income, equity and credit. Sometimes it's not getting approved that's hard -- it's staying approved.
Let me tell you a quick story about "Benjamin Buyer" who found the perfect house for him and his family... He was all ready to close escrow, -- inspections, disclosures and escrow documents were all complete and he was just waiting for his lender to draft the loan documents so he could sign them and they could fund his loan and close escrow the following week. BUT while the loan documents were being drawn-up Benjamin had a "disagreement" with his boss and quit his job in a huff. Long story short, since the loan had not funded yet and Benjamin was no longer employed... his loan was unapproved and he was no longer able to buy this dream house.
Don't let this happen to you... Here is some more information that can help you when you are buying your next home!
WHEN THINGS GO WRONG:
Mortgage approvals take time. In a typical home loan market, it's about 3 weeks from start-to-finish. Approvals can take longer, however, depending on market conditions. For example if rates are low and there's a refi boom on-going, a refinance can take 6 - 8 weeks to close. Banks don't have capacity to do work much faster.
Or, if you're buying a home and it's a short sale or foreclosure, expect delays there, too. With REO, it can take up to 6 months to get to the closing table. Thing is, during that "extra time" -- 3 weeks, 3 months or longer -- a lot can go wrong, and when things go wrong, your loan goes bad. For example, if you lose your job, become ill, or see your home damaged by storms, you may lose your mortgage approval -- even if you were previously cleared-to-close.
Unfortunately, these are all events that are beyond your control. You can't control sickness any more that you can control Monther Nature. But you can control yourself during those extra few weeks.
Good behavior matters in mortgage.
BAD MORTGAGE BEHAVIOR TO AVOID:
Keeping "good behavior" in mind, here are 8 things you should absolutely not do between your date of application and your date of funding. We've been selling real estate for over 30 years and can say with certainty: 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're 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
Now, that won't be hard right?? We know you may find it 100% impractical to have 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. But before doing it, you should check with your loan officer to see if renting a car in the short-term, instead, would be a more mortgage-friendly solution instead.
Communication is key. The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept a cash gift from family and if you do it the "wrong way", your gift may be prohibited from use as part of your down payment funds. There are a bevy of "gotchas" in "Mortgageland" and you can't expect to know them all. These 8 rules, however, are a good start.
Remember, you can't control nature, but you can control you. Be smart with your finances and don't let your mortgage get un-approved.
For more information on what steps you need to take if you are ready to by your next home, please contact us today! We work with some of the industy's best Mortgage Brokers and we will guide you through the entire process.
Â CA DRE Lic. # 00834127
Visit our Official Site for more information on The Joe Sopo Team, our experience, level of commitment to our clients and expertise in the Long Beach, Los Altos area.
"Like" us on Facebook! Personal connections are important to us, let us know what you think by writing a review!
Find your next home today!