Foreclosure How To Buy

6 Things To Avoid While Waiting For A Mortgage Approval

When buying a home, there are two stages in the home loan approval process.Stage 1 starts when a homebuyer submits a mortgage application to his loan officer for a pre-approval.

Preapproval is an initial home mortgage approval. When this is requested, It indicates that the loan is likely to be approved for a predetermined down payment and purchase price.

This preliminary approval becomes obsolete once the buyer signs a purchase agreement. Stage 1 is now over because the buyer must now secure the actual loan from an “underwriter” and not the loan officer.

It is the job of the “underwriter” to make sure that the buyer can meet the lending criteria of the banking institution. He does this by reviewing the buyer’s credit, assets, income, job history and other factors. This is Stage 2.

This procedure should be a formality if the Stage 1 loan officer did an appropriate job. Usually this stage moves along as anticipated. However, sometimes the buyer changes his loan “risk” without intending to do this, but affecting the mortgage approval. The buyer doesn’t mean to decrease his loan probability, it “happens.”

So, consider this a quick primer of what not to do while you’re between Stage 1 and the completion of Stage 2 of the home loan approval process. Following these pointers will help keep the risk profile consistent.

1. Don’t buy a new car (or take on a larger lease payment) 2. Don’t quit your job or change industries (and certainly don’t switch to a heavily commissioned role) 3. Don’t transfer large sums of money into or out from your bank accounts (and remember that “large” is relative) 4. Don’t miss a payment to a creditor (even if you don’t think you owe it) 5. Don’t open a new credit card (even if you’re getting 10% off your new bedding) 6. Don’t accept a cash gift without talking to your loan officer first (because there’s rules on how to accept them)

This is the basic starter list of things not to do. You may still make some errors, but talk to your loan officer if you have concerns or need to break a “rule.” There can be “glitches.” throughout the mortgage loan process. Therefore, keep the lines of communication open between you and your loan officer.

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