What NOT to do During Mortgage Process
In many cases, Arizona Lenders have an introductory email that goes out to their clients at some point in their relationship that gives a list of Do’s and Don’ts During Loan Application (Sample form at bottom link). The problem a lot of the times is we don’t always go through every email in detail or remember everything we read. Not to mention, when we are purchasing our Arizona home, our minds are on so many different things that we forget some of the most important details of what it takes to make our new home a reality. That is why it’s important to know what NOT to do During Mortgage Process.
As real estate agents, the ability for our clients to be able to get the results or homes they are looking for relies on a loan being obtained in most cases. And while I am not a mortgage broker, one of my goals as an Arizona real estate broker, is to have transactions go as smooth as possible while trying to prevent any potential roadblocks.
Roadblocks I have seen come up on multiple occasions is when someone applies for credit in some fashion while in the process of obtaining a home loan and as a result; increases the loan applicant’s liabilities.
How can this happen?
Last week we were less than a week away from closing on a home in Gilbert, Arizona when a client, excited about moving and getting settled in, started purchasing furniture for the home. If the purchase of the furniture was made in cash or didn’t affect the person’s down payment or reserves then it probably would have been fine (always consult your lender before making larger or any out of the ordinary purchases during the mortgage process). However, half the cost of the furniture was put on layaway. This of course is a form of credit and shows up on one’s credit report.
Why does this matter?
Because Arizona lenders will refresh the loan applicant’s credit at the close of escrow to determine that no new credit or liabilities have been established. We were able to close on time in this case but it took extra steps to address the situation and jeopardized the closing.
What NOT to do During Mortgage Process:
- Do Not apply for a credit card
- Do Not make any big purchases on your credit card(s)
- Do Not open any new accounts (This includes co-signing for anyone)
- Do Not have any late payments before closing
- Do Not pay off any credit balances without consulting your loan officer first
For Questions feel free to call Jacob Gaston at 480-600-0091