6 Things That May Kill Your Loan Approval
When I am working with a potential buyer, I review ALL documentation prior to providing a loan prequalification letter. Sometimes, things come up once the buyer finally finds the right home that can stop the loan in its tracks!
1. Overdrafts-this shows the underwriter that you can't manage your money. Keep transfers and spending to a minimum. Be sure you have at least one CLEAN account, no large deposits, no transfers over $500 from other accounts,
2. Unwilling/Unable to provide additional documentation required. I am not asking for more information because I want to get in your business, I am asking because I have to. Keep all documentation with regard to large deposits, etc. that may come up.
3. Making a late payment or increased debt-Sometimes the credit file must be re-pulled prior to closing. This could be because the credit report is over 60 days old or lender required. If your debt ratio (monthly out-go versus monthly income) is tight, don't buy ANYTHING on credit that could affect your payments. Make all payments on time, EVERY TIME.
4. Creative accounting-I just had to turn down an hourly factory worker for claiming $6000 per year in un-reimbursed job related expenses including uniforms and job search. This cut the income by $500 per month...and lost the buyer their home.
5. Losing A Job (fired, laid off, quit)- If at all possible, don't change job situations in the midst of a loan application. It may take a while to get another job and a full months pay check, delaying or cancelling your approval.
6. Documentation that doesn't jive- Provide all documentation requested. If there is anything funky in your credit/job/asset file be ready to back it up and explain it
Bottom line...stay vigilant after the prequalification has been done, check with your lender before making financial decisions that even have a slight chance of affecting you purchase, be ready and willing to provide a paper trail. Follow this advice and your mortgage process should be smooth sailing!
If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure!
If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest. Please contact me at 410-960-2061.