I have talked about this several times but it bears repeating. Below is a video prepared by Joe Massey of Castle and Cook Mortgage. Joe is a great lender and I recommend that you talk with him if you have any questions about the loan process.
The process, procedures and rules for lending are continually changing and especially in the last couple of years. Many people don’t realize that your credit is checked several times before they close on the purchase of their new home. In fact, the things that directly affect your credit rating are also verified several times before your final approval, which is only days before you close. This is what the underwriter’s job is, the underwriter is going into a detailed discovery of your current credit and your credit history, they will ask for clarification on things they don’t understand and may ask for additional documentation like past tax returns or updated bank statements. The underwriter has the final say on your loan even if the loan officer said that you looked good.
So it’s important to stress that you should not do anything that will change your credit in anyway from the time you apply for the loan and go under contract on a property until you sign the final paper at closing. Joe will go over it in more detail but I have seen people be denied loan approval and not be able to buy their new house because of changes right before closing; things like :
- changing jobs
- fluctuations in you bank account or charge accounts (up or down)
- getting a tax extension
- stop paying child support
- behind on a car payment
- opening a new credit card
- buying a boat, or car, or motorcycle, or refrigerator
Even things like paying off a debt or closing a credit card can cause delays in under writing and loan approval. Sometimes things may be out of your control but if you know something is going to change then tell your lender and your real estate agent as soon as possible. If they have notice then they have time to react and to help you get things straighten out before you lose the opportunity to buy a particular home or lose your earnest money.
Communication is the key to a successful transaction.
Here’s the video:[video_left][video_frame] [iframe url=”http://www.youtube.com/embed/rYva-YkD0Gs” width=”572″ height=”312″] [/video_frame] [video_text] [h2]10 Commandments: Applying for Home Financing.[/h2] Joe Massey | Castle & Cooke Mortgage, LLC | 303-809-7769 | firstname.lastname@example.org NMLS 7538 LMB 100017422 [/video_text][/video_left]