Sometimes, even after your mortgage application has been approved, you have to scratch your head at apparent non-sequiturs that attach to the process (for instance, when a loan is made contingent upon your repaying an ultra-low-interest credit account).
Even more so if your perfectly dandy financial situation results in a turndown. How could this happen? The answer usually makes perfect sense…but only if you understand that bankers and mortgage brokers are bound by policies and procedures that apply to everyone currently buying homes in town. Knowing the rules ahead of time can influence how readily mortgage applications are approved. Some guidelines:
Forget adding “mattress money.”
Your bank account gets a thorough going-over, of course. If you have recently deposited a bundle of cash with no apparent source, it looks as if you are artificially hiking up the balance (perhaps with borrowed funds). Too bad about that garage sale: if the cash has not been on deposit for at least 90 days, it can be considered ‘unseasoned’ – likely to raise questions.
Disclose all pertinent info.
Many credit applicants in the process of buying homes assume the credit investigation will be limited to the information disclosed on the application. Not! Underwriters are trained investigators always on the lookout for anything that looks like fraud. Buying homes involves sums that deserve serious investigation; even relatively minor oversights are likely to be discovered. Answer: supply all the information asked for.
Avoid employment hopscotch.
Those who suddenly change jobs while in the process of buying a home raise the odds of their application being affected. This is especially true of wholesale shifts in careers or industries. Even for otherwise praiseworthy professional moves, an employment outlook that appears unpredictable isn’t helpful.
Bottom line: those who will be buying homes need to prepare knowledgeably for the policies that govern mortgage approval. If you are among those who will be buying homes in our area this spring, call us today — we can put you in touch with a mortgage broker to start the pre-approval process!