A credit card, the biggest beneficiary of the ...

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I spend a lot of time advising potential home buyers regarding homes in Georgia.  We discuss various things such as credit, income, assets, family, and future plans.  During these discussions, I have discovered that not only must I tell the borrowers what to do, I need to place a lot of emphasis on what not to do.

1)  Do not apply for credit cards while waiting to be approved for a mortgage.  Most lenders will “monitor” your credit profile during the process or recheck your credit report before closing.  More available credit can mean a lower credit score and a higher DTI (debt to income ratio used to determine if you qualify to buy – money coming in verses money going out).  This can also delay a closing because the future homeowner may have to provide a statement from the account to the underwriter.

2)  Do not be late on any payment.  If you are late on a payment prior to closing, your score will drop.  I saw one this morning drop from 679 to 582.  Crazy! An underwriter will not approve your home loan if you cannot show the ability to pay a bill on time.

3)  Do not quit your job.  If anything changes regarding your employment, tell your loan officer.  One of the last things a lender does prior to closing is verify employment.  No job.  No loan.  This has actually happened.

4)  Do not accept cash gifts and deposit them into your bank account.  Cash gifts are very difficult,if not impossible to prove.  If you are receiving a gift in order to make the down payment at closing, talk to your loan officer first.  He or she can make your life a lot easier with just a little guidance and direction.

I know that the four items above may seem simple, but what if the buyer does not know and goes down that path?  It is painful to have worked so hard to buy the home of your dreams only to have it taken away due to one bad decision.  I work for one of the best mortgage companies in the country and I help people get a home loan every day.  But it is also my job to inform inform inform.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076.  Bonus:  Click to get a free, no obligation preapproval. I love to work with my readers!

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