The DOs and DON'Ts of the Mortgage Process

While purchasing a home can be very exciting, it is important to recognize your spending habits and demonstrate consistency during the entirety of the loan process. Every financial move you make will be on the radar of both the credit reporting agencies and your lender. Below are some tips on what to do and what to avoid in order to attain your ideal mortgage.

Do Get Pre-Approved First- Shopping for a home without knowing how much you are approved for is one of the biggest mistakes a borrower can make. It is crucial to establish what you can afford so that you can shop realistically. Designating about 30% of your net pay to housing costs (mortgage, insurance, taxes, and any other fees associated with the property) is generally a conservative guideline to follow. You may also want to consider spending less than the maximum loan amount you qualify for, ensuring you have flexibility in your budget.
Do Provide Accurate Information- During pre-approval, it is important that you review your documents, confirming you have complete and correct information. Any information not provided, including debt, will be uncovered later in the process, adding extra steps and creating delays.
Do Keep Your Financial Documents in Good Order- Be prepared to gather required documents. Staying organized will be helpful as additional records may be necessary in order to close your loan, even after pre-approval.
Do Maintain Consistency in Your Employment and Expenses- Any deviation from your standard income or regular spending habits may require explanation and/or further documentation. Use your credit cards and pay your accounts/bills as you usually would. Until after the closing date, it is especially important to avoid making late payments.
Do Be Available to Contact- Having reliable communication with your mortgage broker and recovering documentation quickly will be very beneficial to everyone. Remember, this process will move as quickly as you do. It is best to provide requested information as quickly as possible, or within 24 hours.
Do Ask Questions/Become Knowledgeable- Reach out to your loan officer at any time with questions or concerns. We are here to educate and guide you through the entirety of this endeavor. It is also very important to consult your loan officer if you are considering any change that might impact you financially.
Do Improve Your Credit/Debt-to-Income Ratio- It is beneficial to prepare your financial status for a mortgage loan ahead of time. This includes improving your credit score and lowering your debt-to-income ratio. In doing so, you’re more likely to qualify for a better mortgage with lower rates. Reach out to us with any questions.
Do Stay Committed- Patience and cooperation will be key throughout this process. Trust us, it will be worth your while.

Don’t Shop for a Property Without a Pre-Approval Letter- As stated in the first point above, make sure you know the amount you are approved for BEFORE you start searching for a property. You don’t want to fall in love with something you can’t afford.
Don’t Make Any Large Purchases- Refrain from making major cash or credit purchases like furniture, appliances, vehicles, vacations, etc. Also avoid excessive spending both before and during the loan process.
Don’t Change or Quit Your Job- Avoid making drastic life changes, especially in your employment. Lenders are looking for stability. Your employment will be verified on numerous occasions, including hours before closing.
Don’t Open or Close Lines of Credit- Do not open new lines of credit, like a store card or loan, even if cash advances are offered. Any changes in your credit, despite being presumably positive, may have a negative impact in the short-term. Continue to use your cards as little or as frequently as you always have. Do not transfer credit card balances or co-sign for another loan.
Don’t Make Large Bank Deposits/AVOID CASH DEPOSITS- Avoid making deposits that cannot be documented easily, especially cash. Large bank deposits will result in delays since lenders are required to have an explanation and documentation of where your funds are coming from. Maintain a strong paper trail for necessary cash deposits and refrain from making large cash deposits entirely. Even if you are receiving a gift from a family member towards your down payment and closing costs, you will be required to provide supporting records such as a signed letter and/or other authentication documents.
Don’t Transfer Money Between Bank Accounts or Change Banks- Your goal is to look as consistent on paper as possible. This type of activity will result in further investigation.
Don’t Pay Off Debts or Collections- Unless told to do so by your loan officer, do not consolidate debt. Do not borrow money, even from a family member or friend.
Don’t Worry!- There can be moments in this process when you might feel a little anxious. Don’t panic! You are not going through this alone. We want you to feel confident and know that we will be by your side every step of the way.

The DOs and DON'Ts of the Mortgage Process

Do Provide Accurate Information- During pre-approval, it is important that you review your documents, confirming you have complete and correct information. Any information not provided, including debt, will be uncovered later in the process, adding extra steps and creating delays.

Do Keep Your Financial Documents in Good Order- Be prepared to gather required documents. Staying organized will be helpful as additional records may be necessary in order to close your loan, even after pre-approval.

Do Be Available to Contact- Having reliable communication with your mortgage broker and recovering documentation quickly will be very beneficial to everyone. Remember, this process will move as quickly as you do. It is best to provide requested information as quickly as possible, or within 24 hours.

Do Stay Committed- Patience and cooperation will be key throughout this process. Trust us, it will be worth your while.

Don’t Shop for a Property Without a Pre-Approval Letter- As stated in the first point above, make sure you know the amount you are approved for BEFORE you start searching for a property. You don’t want to fall in love with something you can’t afford.

Don’t Make Any Large Purchases- Refrain from making major cash or credit purchases like furniture, appliances, vehicles, vacations, etc. Also avoid excessive spending both before and during the loan process.

Don’t Change or Quit Your Job- Avoid making drastic life changes, especially in your employment. Lenders are looking for stability. Your employment will be verified on numerous occasions, including hours before closing.

Don’t Transfer Money Between Bank Accounts or Change Banks- Your goal is to look as consistent on paper as possible. This type of activity will result in further investigation.

Don’t Pay Off Debts or Collections- Unless told to do so by your loan officer, do not consolidate debt. Do not borrow money, even from a family member or friend.

Don’t Worry!- There can be moments in this process when you might feel a little anxious. Don’t panic! You are not going through this alone. We want you to feel confident and know that we will be by your side every step of the way.