If you haven't personally gone through the mortgage process recently be prepared to supply more documentation than ever before. In the last few years the documentation requirements for a new loan have changed significantly, which means you'll need to supply more documentation then you may think to receive your new mortgage.
Consumers that are willing to provide all necessary documentation requested from their Mortgage Advisor will have a much smoother process than a consumer who battles their chosen Mortgage Advisor over these requirements. The guidelines and requirements are the same for all borrowers but the borrowers who fight these requirements will be the consumers who finish with another mortgage horror story to tell. Consumers also need to be prepared to supply additional supporting documentation once everything is received and reviewed.
The sooner you give into these requirements and accept the fact you will be providing all financial aspects of your life to your Mortgage Advisor, the smoother the process will be. The good news is that you can prepare yourself by following these Do’s and Don’ts when applying for a mortgage.
1. DO keep all of your paystubs, all pages of your asset statements (checking, savings, 401k, etc.) and other important financial documents throughout the application process.
2. DO tell your Mortgage Advisor where your cash to close will come from. This includes all earnest deposit monies.
3. DO notify your Mortgage Advisor if you are planning on receiving a gift for closing. There are mortgage programs that allow a borrower to use 100% gift funds for the down payment and closing costs, but the borrower and donor will need to document these funds in a certain way to ensure they are eligible assets.
4. DO be aware that a new “soft” pull credit report will be required within 5 days of closing to ensure you have continued to make your payments on time and that your credit profile has NOT changed. This includes opening new debt, etc.
5. DO NOT open any new credit accounts. This includes new credit cards, car loans or student loans. You are going to have to wait until after closing to open that store credit card with 0% financing to buy your new TV and or furniture.
6. DO NOT close or open any asset accounts or transfer funds between accounts without first talking to your Mortgage Advisor. Guidelines require underwriting to source and season all deposits and transfers that are greater than $1,000 that are not payroll related.
7. DO NOT change jobs or employers during the application process without first understanding how this may impact your financing. Most mortgage products require at least a 30 day paystub prior to closing.
Once you have given into the process and accepted the fact you need to provide all aspects of your financial life you will ultimately be in a better position to qualify for mortgage. Your Mortgage Advisor is there to help facilitate the approval of your loan. Do not hesitate to contact them with any questions if you think it may impact your mortgage approval.
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