With mortgage rates hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities.
The downside of today’s unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business.
As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete.
This is double the time needed as recently as six months ago.
Because there may be 60 days between the application date and the closing date, it’s important for applicants to remember that mortgage approvals can be revoked at any time prior to funding.
As mortgage applicants, there are many events that are out of our control — job security and health matters, for example. But there are also events that are within our control.
Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely NOT do while your home loan is in process.
It may be the difference between being approved by the bank, and being turned down.
- Don’t buy a new car or trade-up to a bigger lease.
- Don’t quit your job to change industries
- Don’t switch from a salaried job to a heavily-commissioned job
- Don’t transfer large sums of money between bank accounts
- Don’t forget to pay your bills — even the ones in dispute
- Don’t open new credit cards — even if you’re getting 20% off
- Don’t accept a cash gift without filing the proper “gift” paperwork
- Don’t make random, undocumented deposits into your bank account
Now, avoiding these items may not be practical for everyone. For example, if your car lease is expiring and you need a larger vehicle, it doesn’t mean you can’t buy the car — just check with your loan officer first to be sure the new payments won’t “break” your approval.
The same goes for accepting cash gifts from parents. There’s a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of downpayment.
Mortgage lending is full of “gotchas” and with underwriting times stretching to 60 days, it’s a lot more likely that a mortgage applicant will trip into one. Following these 8 rules, though, is a good start.
Also you want to be sure to talk with your Realtor about taking the necessary precautions to protect you in your Contract. As I have stated above, lending practices have changed a lot in the past year, and especially the last six months. Your Realtor should negotiate certain contingenices to protect you throughout the duration of the transaction, even up to closing if at all possible.
If you are looking to buy a Home or Cabin For Sale in the North Georgia Mountains and you are not currently working with a Realtor, you should be. There have been a lot of changes in the Real Estate Market making it very easy to be mislead. Don’t try to do it on your own, obtain the services of a Professional Realtor. I would be grateful for that opportunity. If I can answer any questions or concerns that you may have, please Contact Me, or you can give me a call at 706.633.8186. I would really like to talk with you.
Make it a GREAT day!