With the regulatory changes that have been recently implemented to the mortgage process, borrowers must be informed of how changes may affect them. When prequalifying for a mortgage it is important to know that your financial picture may not change during the process. Here are the top five things to know:
1. Meet With Your Lender Early
Planning your mortgage and your home purchase are essential to avoid pitfalls. Your lender can give you guidance as to what you qualify for and any credit issues you may need to address.
2. Minimize Your Debt
Once you have applied for a mortgage do not increase balances on any debt including credit cards. Do not apply for or incur new debt such as furniture, etc. Your lender may check your credit balances 48 hours prior to closing and this could void your approval.
3. Verify All Deposits
The amount of what is considered a large deposit will differ depending on the borrowers income but it is not a good idea to make a large deposit unless you can show proof of where the money came from.
4. Verify Your Accounts, While You’re at It
The funds brought to closing must be from the accounts verified by the lender. You will be required to show evidence at closing.
5. Be Consistent
Do not change careers during your loan process. This may sound obvious but it occurs more often than one would think. The changing of a job may not be a problem if it is in the same field, however, if possible this should be avoided until after closing.