What Not To Do When Applying For A Home Loan

You've been looking at houses online for a year and you finally got out and made an offer on a home that has been accepted! Better still, the home inspection went okay and you can already picture yourself smiling as you're pouring a cup of coffee & feeling the sunshine beaming through the kitchen window.  You have one last hurdle; your loan needs to be approved.  I can promise you this will be one of the more trying times of the entire purchasing process.  I think if they could, banks would ask you for your first born child as collateral. Luckily, lending requirements haven't gotten that stringent yet. They will, however, ask you for all the paperwork I've previously written about in this article. Just having that paperwork ready is not the only thing you need to be prepared for. There are a lot of Do's and Don'ts you should be aware of.  I'll start with the "Don'ts", since these seem to cause your loan application to be denied, almost certainly.

Don't

• Quit your job, even if it's to take a better job.
• Buy a car on credit 
• Run up the balance on your current credit cards
• Open a new credit line to buy furniture or a big screen TV or your wedding dress, or anything for that matter.
• Deplete your bank account to buy any of the items above
• If your credit is borderline, don't payoff any credit lines or car loans without first speaking with your lender about what impact that will have on your credit score. It doesn't always raise your score.

Do

• Get the paperwork your lender asks for quickly!
• Discuss potential large withdrawals or deposits with your lender before completing the banking
• Keep depositing your regular paychecks into your account
• Keep paying all of your bills on time (Even those that do not get reported to credit bureaus, like electric)
• Disclose any potential changes in finances, work or family with your trusted lender. They'd hate to put you into a home at your current maximum when you've just learned you are having triplets and your expenses are going to dramatically increase.

Ladies & Gentlemen, I implore you to get a referral to a local loan officer. Your Realtor will be an excellent source in recommending an exceptional local loan officer. Of the stories I've heard lately from other Realtors and friends and their loan application experiences, the negative experiences, nearly all of the time, came from people who just walked into a bank and got unlucky enough to come face to face with an inexperienced and/or lazy loan officer who didn't care to understand the needs of the applicant and put them into the wrong type of loan. This is the stuff that keeps me up at night.

If you're thinking of buying or selling a home anywhere in the world, click here and I will put you in touch with exceptional Realtors and Lenders in your area.