Important Things To Do

During Processing of Your Loan

1. Maintain your employment status.

    Lenders verify your employment the day that they prepare your final documents;

    usually a couple of days priior to your closing.  If you lose or quit your job any time up to 

    to the closing date, you're subject to the lenders' discretion and your approval could be reversed.

    Your commitment letter will likely have language that allows the lender to withdraw your approval

    if there are material changes in your financial profile - even at that late date.

2. Dont buy a new car or make any other large purchases. 

    Lenders reserve the right to pull your credit report at any time prior to issuance of 'clear to close'

    status on the loan, and you could be subject to underwriting for a second time at the higher debt

    ratio if this new debt shows up.

3. Continue making monthly payments on your mortgage, credit cards, etc.

    Falling behind on your current debt could cause your fees and your interest rate to go up,

    or the approval of your application could be rescinded.   

4. Verification of Your Liquid Funds   -   (Predominantly for Purchases).

    A. Do not throw out any pages of monthly bank or investment-account statements that you

    receive during the 3 months prior to your application date. 

    B. If your lender approves your loan subject to verification of funds not yet in your account(s),

    you will be required to 'paper-trail' any deposits of $2000. or more.  The only thing that is exempt

    from this is regular base-pay payroll deposits (bonuses and commissions still need paper-trails).

    Keep copies of all checks, deposit & withdrawal slips, and notices of electronic deposit/withdrawal.

    This includes gifts and homequity money as well.

    If you have applied for a non-income verification loan, please point out the accounts

    that would show receipt of your pay-check via direct-deposit.  It's likely that the lender

    underwriting the loan will require alternative documentation to be submitted.

    C. If you transfer money from one account to another after you apply, keep a copy of

    all documents related to the transfer; i.e, checks, withdrawal slips, deposit slips, and 

    notices of electronic transfer/withdrawal.  This too includes gift and homequity money.

    D. Make sure to check in with your loan originator 2-3 weeks prior to your closing to confirm

    your loan-status, and get a clear picture of any outstanding documentation requirements, if any.

    Make sure that you know what steps need to be taken to get a 'clear to close' from the bank, if

    it hasn't already been issued.  Your closing can be scheduled with the bank, but closing

    documents cannot be ordered by your attorney unless you are 'clear to close'.   

5. Place your current home for sale at the appropriate time.

    If you plan to use equity in your current home for downpayment on a new home, there may

    be reason to evaluate your options before your current home goes on the market.

    One of the easiest methods to free up funds is to obtain a homequity line prior to placement on

    the market.  Still, there may be some available options after the fact, such as bridge loans or

    cross-collateral that may help you borrow against a portion of your equity.  Please call to

    discuss.  

6. If you're buying and selling, complete all improvements on your current home.

    A home that's even partially under construction may be difficult to sell for its true value; and

    it may be difficult to sell for the fair price that was intended - thereby causing significant

    transactional problems.

7. About prior bankruptcy.

    Most programs require that you be outside of bankruptcy for at least two years

    before you can qualify for a loan; but some allow you to borrow right away.

8. If you're unsure about anything, call your mortgage originator and ask.

    I often encounter people who feel that their questions may seem ridiculous in some way -

    and as a result they hesitiate to ask them.  I would encourage you to ask anyway; I have

    had enough situations over the years where an issue was avoided because the borrower

    spoke up at the right time.