Have you been shopping for a good low interest mortgage on a house you intend purchasing? Most prospective home buyers are unaware of the factors in the lending process that can potentially sabotage getting a mortgage. Here are 7 ways you to avoid committing mortgage sabotage when purchasing a home:
How to Prevent Ruining a Mortgage?
- Avoid “gifting” paper trail nightmares – monetary gifts from relatives are common in the home buying process. However, they must be handled in certain ways in order to avoid having a paper trail nightmare. Speak with a lender or mortgage broker before accepting any funds. There is a “Gift Letter” form that must be filled out before closing.
- Be a paper hoarder – save all of your bank statements and wage stubs from the time you decide to buy a home until closing. Lenders will need these when processing your home loan application. So remember to keep these handy.
- DON’T apply for any new credit – if you do, it’s going to show up on your credit report, thereby forcing the lender to verify that you have no new outstanding debt. If you’re thinking about adding debt or paying debts off, wait until you’ve discussed this with your mortgage broker.
- DON’T forget to document any asset you’ve sold – this is especially true when selling an asset (e.g. an antique, collectibles such as baseball cards, a vehicle, etc.) to acquire the cash needed at closing. Most importantly, make sure you document any asset that you’re selling for the additional funds.
- DON’T move any funds around – all your funds must be verified prior to closing. This includes the sources of those funds as well. The best advice is to leave your funds alone until after closing as this can cause a paper trial nightmare for lenders.
- DON’T pack away any of your financial documents – make sure you keep all of your financial documents handy. Be sure you have your 1099’s or W-2’s, income tax returns, and any other important financial documents from the last 2 years. Furthermore, if you sold a home during that time, be sure you have your HUD-1 Settlement as well.
- Sources of funds must be verified – lenders will look for any large deposits you’ve made into your checking and savings accounts or retirement funds. Make sure you’ve documented the source of these funds such as bonus checks, money from selling an asset, pay stubs, etc.
Contact Your Trusted Mortgage Expert Today!
If you’re in doubt about anything, always consult with a mortgage broker like Liberty Capital Services. We can help you navigate the home loan process. To learn more, call us today at (614) 505-0620. Our experts are available to answer your queries, so all in today!
