While Waiting For Your Home Mortgage Approval There Are 6 Actions To Avoid
When buying a home, there are two stages in the home loan approval process.Stage 1 starts when a homebuyer submits a mortgage application to his loan officer for a pre-approval.
A pre-approval is a "walk-through" mortgage approval that says -- at a given purchase price and downpayment amount -- the home loan application will very likely be approved.
This preliminary approval will not matter once the application goes to review for the actual mortgage loan. Stage 1 ends when the "underwriter", not the loan officer becomes involved.
Stage 2 of the process occurs when a mortgage underwriter is reviewing credit, income, assets, job history and probable other things. It is the job of the underwriter to insure that the buyer can meet the lending institution's criteria for loans.
If Stage 1 was well completed by the loan officer, Stage 2 should be a formality. This stage usually proceeds as expected. However, it is possible that a buyer may innocently alter his "risk profile." If this occurs, it will alter his loan risk thus affecting the mortgage approval. No one means to do this, but it just "happens."
During the mortgage approval process, the buyer must not do anything that will increase his loan risk during the time between Stages 1 &2. Risk needs to remain consistent. The following are 6 things of the "Honey Don't" list for this interim period:
1. Don't buy a new car (or take on a larger lease payment) 2. Don't quit your job or change industries (and certainly don't switch to a heavily commissioned role) 3. Don't transfer large sums of money into or out from your bank accounts (and remember that "large" is relative) 4. Don't miss a payment to a creditor (even if you don't think you owe it) 5. Don't open a new credit card (even if you're getting 10% off your new bedding) 6. Don't accept a cash gift without talking to your loan officer first (because there's rules on how to accept them)
There's other items, too, but this a good start. Now, avoiding these mistakes may not be practical for everyone. Therefore, if you know you're going to violate a "rule", check with your loan officer first. There are a lot of "gotchas" in mortgage lending and it helps to have professional guidance for your individual questions. - 13506
A pre-approval is a "walk-through" mortgage approval that says -- at a given purchase price and downpayment amount -- the home loan application will very likely be approved.
This preliminary approval will not matter once the application goes to review for the actual mortgage loan. Stage 1 ends when the "underwriter", not the loan officer becomes involved.
Stage 2 of the process occurs when a mortgage underwriter is reviewing credit, income, assets, job history and probable other things. It is the job of the underwriter to insure that the buyer can meet the lending institution's criteria for loans.
If Stage 1 was well completed by the loan officer, Stage 2 should be a formality. This stage usually proceeds as expected. However, it is possible that a buyer may innocently alter his "risk profile." If this occurs, it will alter his loan risk thus affecting the mortgage approval. No one means to do this, but it just "happens."
During the mortgage approval process, the buyer must not do anything that will increase his loan risk during the time between Stages 1 &2. Risk needs to remain consistent. The following are 6 things of the "Honey Don't" list for this interim period:
1. Don't buy a new car (or take on a larger lease payment) 2. Don't quit your job or change industries (and certainly don't switch to a heavily commissioned role) 3. Don't transfer large sums of money into or out from your bank accounts (and remember that "large" is relative) 4. Don't miss a payment to a creditor (even if you don't think you owe it) 5. Don't open a new credit card (even if you're getting 10% off your new bedding) 6. Don't accept a cash gift without talking to your loan officer first (because there's rules on how to accept them)
There's other items, too, but this a good start. Now, avoiding these mistakes may not be practical for everyone. Therefore, if you know you're going to violate a "rule", check with your loan officer first. There are a lot of "gotchas" in mortgage lending and it helps to have professional guidance for your individual questions. - 13506
About the Author:
If you are in the early stages to Buy a Home then check out Rob Kosbergs' Complete FREE Guide on Buying your Dream Home with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog
posted by M Davids at
3:31 PM
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