Keys To A Smooth Loan Process
Credit inquiries for the past 6 months will show on your credit report and you will have to explain them all. If you are applying for a loan, DO NOT ADD anything to your credit. Make your purchases after closing. A new policy has lender’s do a “soft pull” of your credit just before closing to verify that nothing has changed.
Bank statements are always an issue! A bank statement needs to be official. The bank name, your name, FULL account number and a 30 day history need to show. A transaction history from your online banking is not sufficient. Also, any large deposits on the statement must be verifiable. Cash is no good in the mortgage world. Have a clean 30 day history and things will go much smoother.
Your taxes must be filed! Your lender will pull your tax transcripts from the IRS and submit them with your file. There isn’t a mortgage lender out there that doesn’t require tax transcripts.
Do you have a loss or any unreimbursed expenses on your taxes? If you do, they will have to be subtracted from your income. This can cause complications and delays with your loan qualification.
Pay stubs are sometimes problematic. Your pay stubs must be the most recent and include your employer/company name, your name and year-to-date income. Your lender may need updated stubs during the loan process. Be sure to maintain your hours during this process as a reduction in hours will result in a recalculation of income.
Gift Funds are great! However, if someone is giving you a gift for your down payment, have them keep the funds until closing. It is much easier to have them make the check/wire directly to the title company than provide the documentation required to explain how the money appeared in your account.
Other considerations to discuss with your loan officer:
- Are you considering a change in employment?
- Do you have a business on the side?
- Do you pay child support, alimony, or have a garnishment to your wages?
- Are there any issues that could cause a problem with your loan?