| 6 Things To Avoid While Waiting For A Mortgage Approval |
| Articles - Mortgage |
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Stage 1 of the 2 stages of the mortgage loan approval process begins when a potential buyer submits the completed mortgage application to his loan officer for a pre-approval.
Stage 1 of the 2 stages of the mortgage loan approval process begins when a potential buyer submits the completed mortgage application to his loan officer for a pre-approval. A pre-approval is a "walk-through" mortgage approval that says -- at a given purchase price and downpayment amount -- the home loan application will very likely be approved. Stage 1 ends when the buyer signs a purchase contract on a home. At this point, the "walk-through" approval is useless because the buyer now needs a real home loan approval from an underwriter and not a loan officer. During the second phase of the approval process, a mortgage underwriter is reviewing income, assets, credit, job history, and other items, too; the underwriters job is to make sure that the buyer meets the bank's criteria for lending. If the loan officer did his job in Stage 1, Stage 2 is just a formality. And most times, it all goes according to plan. Occasionally, though, a homebuyer sabotages his own mortgage approval by inadvertently changing his "risk profile". It doesn't happen on purpose, of course -- it just 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) There's other items, too, but this a good start. Now, avoiding these mistakes may not be practical for everyone. Therefore, if you know you're going to violate a "rule", check with your loan officer first. There are a lot of "gotchas" in mortgage lending and it helps to have professional guidance for your individual questions. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. If you are in the market to Buy a Home then check out Rob Kosbergs' Detailed FREE Report on Buying your Dream Home with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog |