Despite all the talk of how difficult it is to be “mortgage approved,” the basics of mortgages haven’t changed. Mortgage approvals are still the 3-legged stool of income, equity, and credit.
Sometimes, though, it’s not getting approved that’s hard — it’s staying approved.
Click to get today’s mortgage rates.
When Things Go Wrong
In a typical home loan market, mortgage approvals take about 3 weeks from start-to-finish.
However, depending on market conditions, it can take longer. For example, if rates are low and there’s a refi boom going on, a refinance can take 6 weeks to close. Banks don’t have capacity to do work much faster.
If you’re buying a home and it’s a short sale or foreclosure, expect delays there, too. With REO, it can take up to 6 months.
During all that “extra time,” a lot can go wrong, which ultimately affects your loan. For instance, if you lose your job, get sick, or your home gets damaged for any reason, you can lose your mortgage approval, even if you were previously cleared-to-close.
Unfortunately, such events are beyond your control. But, you can control yourself during these times. Remember, good behavior matters in mortgage.
Bad Mortgage Behavior, Defined
Here are 7 things you should absolutely not do between your date of application and your date of funding:
- Don’t forget to pay your bills!
- Don’t quit your job to change industries or start a new company
- Don’t switch from a salaried job to a commission-based job
- Don’t transfer large amounts of money between bank accounts
- Don’t buy a new car or trade up to a bigger lease
- Don’t open any new credit cards
- Don’t make random, undocumented deposits into your bank account
And that’s it.
For example, if your car lease is expiring, you have to renew the lease. Although, before you renew your lease, check with your loan officer to see if this decision would be more mortgage-friendly.
There are a bevy of “gotchas” in Mortgage land and you can’t expect to know them all. These 7 rules, however, are a good start.
Get Low, Long-Term, Locked Mortgage Rates
Mortgage refinances take time and the best thing while your loan is in process is to keep the status quo. You can’t control nature, but you can control you. Be smart with your finances and don’t let your mortgage get un-approved.
0Pointloan 