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The Dos and Don’ts of Home Loan

the dos and don'ts of home loan

With the rising wages and the new tax reform law in place, you might want to purchase a new home and take on a mortgage.  Owning a home is everyone’s dream as it is something that will also make your future secure.  For families, this is the culmination of all the hard work spent daily in their jobs and a secure place to raise their children.  Whatever reason you might have in taking in a loan you should remember that it entails big responsibility.  Here are our DOs and DON’Ts OF HOME LOAN.

The DOs of Home Loan

In our Dos and Don’ts of Home Loan let us start with the things that you should always do and remember:

  1. Continue paying your debt to help keep your debt ratio low.
  2. Immediately explain any credit blemishes and credit inquiries as this will help get your mortgage approved.
  3. Submit all items requested by Loan Officer within 24 to 48 hours to get your loan closed on time.
  4. Since FHA requires proof of a long-standing relationship, do notify your Loan Officer if you plan to receive gift fund for closing costs.
  5. Inform your loan officer in case of changes in employment or marital status.  These changes include a change of employer, recent raise, transfer, change of pay stubs, divorce and marriage among others.
  6. It is important to research and choose a homeowners insurance company and program correctly.  Obtain this no less than 5 days prior to closing.  Always review your insurance documents to ensure your mailing address and property address are the same when purchasing/refinancing your primary residence.
  7. In case there are any special circumstances with your closing please inform your Loan Officer immediately.  These changes include utilizing a Power of Attorney and sending closing documents to you at a location other than the title company.
The DON’Ts of Home Loan

Now that you know the “Dos of Home Loan”, let us proceed with our next topic in our Dos and Don’ts of Home Loan which is what should you avoid:

  1. Avoid making any major purchases prior to closing.  Major purchases like buying a new car, furniture, appliances, electronics and other might have an impact on your approval.
  2. Avoid opening or increasing any liabilities during the loan process since this will also impact approval.  So for now, no new purchases using your credit cards or no new signature loans. etc.
  3. As much as possible avoid changing jobs or employment.  If you need to change job or employment you can first inquire its effects on your loan approval.
  4. Do not obtain and/or deposit large sums of money without proper documentation within 60 days of your closing.  Guidelines set by the FNMA/HUD require documentation to the source of these funds.  Documentation needed include copy of bonus check, a copy of insurance settlement, gift letter, etc.
  5. Do not close, open or transfer any asset account without acquiring the proper documentation required for your loan file.  If you transfer all the funds in your stock account to your savings account, then documentation is required.

So that’s it.  I hope that this article helps you in becoming a responsible homeowner and borrower.  Remember that you should always maintain a good credit score so that your life will be a lot easier.

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