Make Sure Your Mortgage Gets Approved

How to Make Sure Your Mortgage Gets Approved for Your Denver Home

Make Sure Your Mortgage Gets Approved: In this seller’s market it is crucial that you get pre-approved for a loan before you start shopping. At least that is the case in the Denver real estate market. If you put an offer in on a house without being pre-approved, It’s not likely that your offer will not be accepted. Most homebuyers are finding that when they find the home they want to buy, there are five, ten or fifteen other buyers that are also putting offers in on that house. Sellers want to know that the buyer they choose is already pre-approved.

So does pre-approval mean that you are done? Does it guarantee that you are getting a loan. No it doesn’t. Although pre-approval holds a lot more weight than being pre-qualified, it doesn’t mean that things can’t go wrong and you are unable to get the needed financing.

So once you are pre-approved, what can you do to make sure your loan goes through? Basically, you don’t want to change anything in your financial life from the point of your loan application until you close on your new house. Effective in 2010 is Fannie Mae’s Loan Quality initiative which requires lenders to track borrowers circumstances between the time they apply for the loan and the time of closing. So lenders will be looking at your financial situation not once but twice and don’t make changes between those times.

Here are some DON’Ts to be aware of:

Don’t apply for any new credit cards or lines of credit. This may seem like a great time to open up a credit card at your local furniture store to outfit your new home, but wait until you have that new home in hand.

Don’t close any credit accounts. It may seem logical to close some of your open lines of credit especially the ones you haven’t used in years. However, this may end up hurting you. Don’t make these changes unless directed to do so by your mortgage broker.

Don’t be late on any payments! This is a time like no other to make sure you are diligent about paying all your bills in a timely manner.

Don’t buy a new car! If you happen to be in a position to where your lease is up on your car during the time that you are in the process of loan approval, seek the advice of your mortgage broker as to the best way to move forward without affecting your home loan.

Don’t change jobs! This may be unavoidable if you are laid off. And it may not affect you if you secure a new job, making relatively the same income in the same field. But this is definitely not the right time to pursue a new career voluntarily.

Don’t cosign a loan for anyone. Cosigning a loan is just like you taking out a new loan.
Don’t spend your savings. Make sure that the cash you have in hand when you applied for your loan is still there prior to closing. The mortgage company will check.

Don’t move money around without a paper trail. Your mortgage company will be looking at your bank statements. Even large deposits without an explanation or proof of where it came from can cause problems.

Basically, when applying for a home loan, don’t change anything in your financial life until after you have closed on your new house! And if you must, consult your mortgage broker for advice.

Looking to Buy a House Today?

If you are ready to buy a home in the Denver metro area, call me today: 720-476-0370. I would love to help you find a home and construct a winning offer.