STEP 5 – START THE LOAN PROCESS

With your interest rate locked in, it is time to start the loan process. The key to making this process go smoothly is to provide everything that has been requested of you as soon as possible to your mortgage specialist. (Click here for loan document checklist.) If there is anything that you haven’t brought to the mortgage consultant’s attention, now is the time. There used to be ways in which borrower’s could hide things, but with everything that has occurred in the mortgage and real estate market over the past few years, lenders and underwriters have closed the loopholes. For instance, perhaps as a union worker you had a lot of write-offs on your tax returns. This was something that would have slipped through the cracks before, but now every lender is getting tax verifications back on every loan to see if you have things that you didn’t disclose. They will discover before closing that you had write-offs and deduct this amount from your income which can cause your loan to be denied.

Small list of things that may delay loan approval or cause your loan to be denied:

1. New inquires into your credit. Any inquires into your credit after your application will need to be explained and documented. Please refrain from applying for any new loans or credit cards until after your loan has closed.
2. Large deposits of money that appear on your bank statements that are not from a family gift or payroll check. The source of these deposits will need to be documented. If it isn’t from an eligible source as determined by lending guidelines, you won’t be able to use those amounts toward the funds needed for closing.
3. Going past 30 days late on any bills.
4. Taking out loans prior to closing.
5. Expired identification.
6. Unfiled tax returns.
7. Untimely response to any request of documentation.
8. Change of jobs.  If you are in the process of changing jobs, or will be changing jobs during the loan process, please be advised that this can cause a major delay on your loan closing (even if it is for more money doing the same job for a different company).