All Posts Tagged: lending

5 things for prospective mortgage borrowers to avoid

Victor Polich
Mortgage Banking

When you’re on track to get a mortgage, there are plenty of things you will need to do to close the loan. Your to-do list will be pretty long. On the flip side, there are also some things you’ll want to avoid doing. So here are the top five items that should be on your not-to-do list.

Young man sitting near a window, reviewing info on his tablet while holding a cup of coffee.1. Changing jobs
Job stability and time-on-the-job are considered two important factors. If you’re offered a great job opportunity after receiving a loan preapproval from a mortgage lender, discuss the potential implications for your loan preapproval with your mortgage lender before making a change. Many lenders will accept a job change, as long as you can show pay stubs for at least 30 days from your new employer.

2. Increasing the balances on your credit cards
By increasing the balances on your credit cards, you also increase your monthly debt payments—and in turn decrease the mortgage amount for which you qualify. Also, it’s important not to skip any payments—especially a mortgage payment. Keep in mind almost every lender will pull an updated credit report just prior to closing to ensure your financial situation hasn’t changed.

3. Opening a new credit account—even with $0 balance
Mortgages are approved based on very specific credit requirements, and taking on new credit may lower your credit score.

4. Spending part of your savings
It’s critical that you continue to show you have sufficient funds saved to cover all the costs associated with your home purchase, plus sufficient post-closing reserves. A significant dip in your savings may change your ability to cover expected upfront mortgage costs and lower your lender’s assessment of your financial picture.

5. Depositing money without a paper trail
Mortgage lenders are extremely diligent about ensuring that all funds to purchase a home are the result of personal savings or other acceptable sources of funds. If you are in the mortgage approval process, any large deposits must be explainable and trackable – even if you are merely moving your existing cash from one account to another.

To end on a positive note, here are 3 simple steps that may help tip the odds in your favor:

  • Check your credit score – It’s common for credit reports to contain errors. Make sure any mistakes are cleared up before applying for a mortgage.
  • Disclose all relevant information – Be honest with your lender and share any past financial issues you may have had.
  • Get preapproved – Preapproval not only lowers your stress level, it also reassures sellers and can help them take your offer more seriously.

Following these guidelines may help position you for eventual loan approval — and that exciting step towards your new home.

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Looking to buy or refinance? Pay attention to the number 43.

Stew Larsen
Posted by Stew Larsen
Mortgage Banking
Young couple reading financial documents in kitchen

Your total debt payments relative to your total income is called your debt-to-income ratio, which prospective lenders will be watching.

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What small business taught me: the importance of enthusiasm

Don Mercer
Posted by Don Mercer
Small Business Banking
Young, smiling man wearing an apron and holding a pen while sitting at a table and talking to a business woman.

It takes enthusiasm to be the founder, janitor, receptionist, head salesperson, marketing department, and usually financier of a fledgling business.

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In the Market: Millennials’ spending & credit trends

Nneka Madus
Posted by Nneka Madus
Mortgage Market Analyst
Young man sitting in big arm chair near bay windows in his living room.

Since many millennials aren’t buying homes, what exactly are we spending our money on?

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5 strategies for your business as interest rates rise

Don Mercer
Posted by Don Mercer
Small Business Banking
Woman reviewing business plans at a desk

I’ll tell you up front that in the near term the rise in interest rates is not going to be a life-changing event.

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