For most people, the process of applying for a home loan can be daunting and confusing. It’s a long process where one is required to take many steps to obtain the financing and there are many pitfalls along the way.
Applying for a Home Loan
The good news is that it is all worth it when you move into your new home at the end. But here are some things that you should not do when you are involved in a loan application/approval period.
1. Do not deposit unusually large amounts of money into your accounts without keeping detailed records. When money suddenly shows up in one of your accounts, it must be documented so the lender knows the source of the funds.
2. Do not move money from account to account more than necessary. The lender needs to see what you have access to and where it came from. If money is moved around a lot this can cause complications.
3. Don’t change jobs. Income from a new job may require a probationary period before it can be applied toward the qualification of your loan.
4. Don’t purchase anything new that will add to your normal debt, such as a car, expensive watch, etc. If your expenses and debt rise during the loan application period, it could adversely affect your ability to qualify for the loan.
5. Do not run a credit report on yourself. No matter what the ad says about obtaining a free credit report, do not get one! This will count as an “inquiry” on your report and will have to be explained in writing to your lender.
6. Do not consolidate your bills before getting advice from your lender. This, again, is a way of “rocking the boat” during your home loan application and should be discussed with your lender if you feel it is necessary.
7. Do not pack or ship any paperwork or information that will be required for your loan. This seems simple and obvious, but it happens. These items include W-2s, divorce decrees, deeds, tax returns and so on. You will be asked for all kinds of documents during this time and you want to make sure you have everything on hand.
If you are working with a good lender who knows what they are doing, they will guide you skillfully while you’re applying for a home loan, and you will be fine. The above items are all simple things people may choose to do at any given time, but during the home loan application process, it is definitely not the time.
Steer clear of these actions to help make the process smoother and get into your new home quicker and with less headaches. Do you have more questions about the home loan process? Feel free to reach out to me in the comments below.
Partners Trust is located at 594 E. Colorado Blvd., Pasadena. For more information, call (626) 696-4800 or visit www.thepartnerstrust.com or call Aason directly at (626) 399-4696.