Mortgage Dos and Don’ts

Statement of Understanding

(The Dos and Don’ts After You Apply for a Mortgage)

The DO’s

• DO shop for Homeowners Insurance.  Don’t wait until the very end of the process to quote your insurance.  Give yourself the opportunity to look at different options.
• DO continue to make all payments on time.  New late payments will lower your credit score and cause you to qualify for a higher rate, more costs, or disqualify you for a mortgage altogether.
• DO keep funds in the same account.  Moving funds around from one account to the next requires more documentation and paper tracking. If possible try to keep all funds in as few accounts as possible.
• DO keep copies of all checks and transfers. If money does need to be moved, do keep copies of all deposits, transfers, and checks. 
• DO provide all necessary paperwork as soon as possible.  The sooner we receive all the paperwork needed to approve your loan, the less chance of problems later in the process.
• DO notify your Mortgage Advisor of any job changes, promotions, demotions or layoffs.  We will verify your employment at the beginning of the process and we will re-verify shortly before closing.  Accurate phone numbers also help us contact the right person fast.

THE DON’Ts

• DO NOT take on new debt. This includes credit cards, car loans, student loans, furniture, and co-signing for another person on any loan.  This will affect your credit score and your debt to income ratio and may disqualify you for the mortgage you are trying to obtain.
• DO NOT max out your credit cards.  Even getting close to your credit limit may affect your credit score negatively and jeopardize your loan.
• DO NOT close out credit card accounts.  Closing credit card accounts during the loan process will lower your overall credit availability and may lower your credit score.
• DO NOT deposit  cash.  Underwriting will require you to document 2 months’ of bank history for all accounts used in your transaction, or that get direct deposit from your work. Any large deposits that can’t be traced from a verifiable source will cause underwriting issues. 
• DO NOT change jobs.  Of the factors underwriters consider in reviewing present employment, they are partial to stability on the current job.  At the very least, changing jobs requires more paperwork, and it can delay your closing, or even result in loan denial
• DO NOT pack too soon.  Know where you’ve stored tax returns, bank statements, and other important documents, or how to access them online.

**This does not mean that none of these things can happen.  These are merely suggestions.  It is strongly recommended that before any one of these events occur you consult your Mortgage Advisor for guidance on the impact of your loan.