Closing Loans

Go to WWW.OptOutPreScreen.com to get your name off of the three credit reporting agencies farm sale list.  Yes, they SELL your information to creditors who want to see who is considering a home loan whether it be a refinance or a purchase of a home.  Just the process of a Bank or Mortgage professional pulling your credit can trigger a bunch of offers and junk mail. They sell your information to other creditors. If you go to that web link address to Opt-Out you can do it with a few clicks for 5 years or write in to the address provided and opt out for life.  I have seen this improve individual credit scores a few points due to being taken out of the system for receiving all those offers (it’s a slightly higher risk category since you may take them up on those offers of more credit).  Besides that, if you want to buy a house, you shouldn’t be applying for nor opening any new credit cards.  Most of the offers will come from on-line banks and untrustworthy sources so it’s best to cut off as much of that activity as possible.  Credit score up a few points and not as much junk mail – this is a good thing.

Keep originals of all pay stubs, bank statements, and other important financial documentation. We are required to update any documents that are over 30 days old prior to the closing of your mortgage loan. This documentation is required even if your loan is approved and in process.  If you are buying a home, we will need to verify your earnest Money deposit clearing through your account to use those funds as part of the down-payment as well as the final funds for closing your loan.

PLEASE notify me if you plan to receive gift funds. We have forms that will need to be filled out and documentation is required from both gift giver and gift receiver. NEVER USE/RECEIVE CASH AS A GIFT.  Lenders are very particular about sourcing the funds and cash is extremely difficult to source.  All funds for a home purchase need to be seasoned or sourced. Traditional bank statements are required at the beginning of each loan submittal, so ask for help whenever you have these types of deposits if you do not want to have to provide proof.  Less paperwork is just easier.  If that is not possible, let me know right away, I will help with this process and make it easier.

DO NOT obtain and/or deposit sums of money (ESPECIALLY CASH) anything other than your employment income before or during your transaction. All Lender guidelines require documentation as to the source of these funds (i.e., copy of bonus check, copy of tax refund, copy of insurance settlement, gift letter with copy of check and deposit slips, gift giver’s statement, etc.). Cash is not allowed in a purchase transaction. Seasoning or Sourcing is required.  Seasoned means sitting in a Bank account for a month or two so that the funds are available and in the beginning balance of the bank statement.  Sourcing means that any large deposit (or multiple smaller deposits adding up to a large amount of funds) is questioned and then you will need to explain and provide copies of the deposits checks to prove where the funds came from – automatic deposits from tax refunds are not questioned, as it is obvious where those funds came from if indicated on the bank statement. 

PLEASE notify me of any employment change plans in the future or current employment that involves self-employment or second jobs.  It is important to let me know of separate/alternate sources of income (i.e., side business/hobbies with income, change of employer; recent raise/promotion; change of pay status, such as salary to commission, etc.). SELF-EMPLOYED BORROWERS have their income averaged over 24 months for qualifying income (two full yrs. taxes required) with all expenses written off on taxes is typically subtracted from gross income.  In general, all newly employed self-employed home loan buyers will need 2 full years of taxes.  Since it is not typically regular and consistent income, they will want to see the income on the taxes reflecting income going up year over year. They want to see that taxes are being paid on some of the income (not a loss taken for the year) as this reflects a successful business and income source that is trending upward.  They feel this is a good way to determine if the home loan will be paid back in a timely manner.  Income going down is not a good sign, but not an automatic no, but sometimes can result in lower income being used. 

Please so not make any major purchases during or prior to closing (i.e., new car, furniture, appliances, electronics) even if you are near closing and are excited about moving in, because this might impact your qualification.  Do not obtain new credit including credit cards, signature loans, etc., during the loan process. You will be asked at closing if you have made any changes to your credit profile and you will have to sign a document about any undisclosed debt. It is important not to apply for other loans, credit cards or have multiple credit pulls since this can impact your credit score.  Your credit score is how your rate, debt to income is calculated, so this can mean that you could turn an approval into a denial with those types of changes.  Often, we must update and re-pull credit or the bank will just update the credit report and if these changes are significant enough, it could have a major impact on your ability to close your loan.  Even closing an open credit line (especially your oldest credit card) can lower your credit score and impact your loan. Always ask first before making any assumptions or taking that step.  If it is an emergency, we can usually work out, but I need to know so please allow me to guide you.