TEN DO’S AND DON’TS DURING THE MORTGAGE PROCESS
1. DON’T APPLY FOR NEW CREDIT – Do not buy a new car, boat, furniture etc without discussing with your loan officer. These can impact your credit score and your debt ratios which may impact your ability to qualify for your mortgage. New regulations require that your credit be rechecked 48 hours prior to closing so new changes will be seen.
2. DEPOSITS AND DOWN PAYMENT FUNDS: Whether you are purchasing a new home or refinancing, any deposits to your bank account that are not payroll deposits will be questioned. Keep a paper trail of deposits slips, copies of checks and documentation for the source of the income.
3. EMPLOYMENT: Discuss any changes with your loan originator such as going on maternity leave, changing companies, reducing your hours.
4. DON’T PAY OFF COLLECTIONS OR CHARGE OFF’S. If you want to pay off old debts, request a “letter of Deletion”. A paid collection is like pleading guilty to an outstanding ticket.
5. DON’T CLOSE CREDIT CARD ACCOUNTS. If you close credit card accounts it may cause your debt to available credit ratio to go up which will reduce your credit score.
6. DON’T MAX OUT OR OVER USE CREDIT CARDS. Try to keep balances below 30 percent of their limit during the loan process. Try to keep usage of cards low EVEN IF YOU PAY THEM IN FULL EACH MONTH.
7. DON’T CONSOLIDATE YOUR DEBT. When you consolidate your debt into one or two credit cards, it will appear that you are maxed out on the new card and your score will be impacted.
8. DO NOT DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This includes adding new accounts, co signing on a loan or changing your name and address with the bureaus.
9. MAKE SURE TO STAY CURRENT ON ALL LOANS ESPECIALLY YOUR MORTGAGE IF YOU HAVE ONE. One mortgage late will not only kill your score it will make you ineligible for a loan with most lenders for at least a year.
10. CALL FOR A DETAILED ANALYSIS OF YOUR CREDIT REPORT.
Thanks Peter Grabel, Luxury Mortgage C-917-653-9082.