Even the simplest home loans take time to close. These pointers can help you avoid mistakes between application and closing, making your loan procedure as short and painless as possible!
Loans and Big Purchases
Signing or cosigning a debt is not a good idea. Your debt-to-income ratio is affected if you commit to a separate loan before it closes. Even if you cosign for someone else, you are still responsible for the loan payments Your loan officer will require more documentation from you to close this new loan, which may cause a delay.
Automobiles, boats, and other high-end purchases should be avoided. Purchases like these can change your debt-to-income ratio or number of reserves, preventing you from qualifying for a house loan or delaying your first-time home buyer loan closure. It’s better to wait until after the closing, check your budget, and make any major purchases you can easily afford.
Large Deposits (Other Than Your Paycheck)
Because mortgage companies are obligated by federal law to investigate significant deposits, any unusually large bank deposits may require a written explanation, which may cause your home loan to be delayed.
Banking
Change your bank account as little as possible. Underwriters frequently require bank statements and documents to approve your loan. Changing banks can necessitate the provision of all new statements, which can cause delays.
Job Shift
Quitting or changing employment can impact your ability to qualify for a house loan. If you’re thinking about changing jobs or companies, wait until after closing if at all possible. Most employers will be sympathetic to your need to wait.
Changes in Credit
Open and close credit lines as little as possible. Opening new credit cards will result in hard queries on your credit report, and closing credit lines may result in a higher credit utilization rate. Either of these could affect your credit score and, as a result, your interest rate or home loan eligibility.
Delinquencies
Pay your bills on time. Even one late payment can significantly influence your credit score, and it takes time for your score to recover when the payment is paid. This decrease in your credit score could harm your interest rates or house loan approval, so be extra cautious and prevent any late payments before closing.
Credit Checks
Allowing someone other than your loan officer to do a credit check on you is not a good idea. Many credit checks result in hard queries on your credit report, lowering your credit score overall. Because credit checks can affect your rates and home loan qualification, it’s best to wait until after your loan is closed before doing so.
Payday
You should not take a wage advance. This may cause your payment schedule to change, thereby jeopardizing your home loan approval.
Stay in Touch
Be sure to be prompt in answering all of your loan officer’s inquiries. Your loan officer is obtaining information and documents from you necessary to close your home loan. Stay in touch and respond to your loan officer requests so there is no delay in closing.
Final Note
As you can see, a lot goes into purchasing a home and obtaining a mortgage. The greatest suggestion is to start by being prequalified with a mortgage broker in Michigan or your preferred lender. After that, make sure you’re up to date by asking many questions. After all, the more you know about closing a home loan, the less likely you will run into issues. And you’ll be ready if and when it happens.
Mortgage City is the place to go if you seek a reputable mortgage broker in Michigan and beyond who can help you get an FHA loan. We provide a variety of financing alternatives to assist you in getting into the home of your dreams as quickly as possible. We are licensed and ready to assist you in the following states: Michigan, Florida, New Hampshire, Texas, California, Massachusetts, Indiana, Colorado, and Ohio. For further information on your financing options, please get in touch with us at (248) 930-8709!
