October 9th, 2017 6:58 AM by Jackie A. Graves, President
Getting approved for a mortgage is not the same as getting a
mortgage. Until your lender has transferred the money to your buyer's bank,
it's still possible for the process to be derailed.
means that once you have received a "yes," you still have to be careful. Your lender will be watching you
and will continue to monitor your credit and your general financial well-being.
issues like inspections or caveats about the seller finding a new home can
delay your closing. Be diligent about your finances until you actually own the
home and avoid doing these things that can derail your approval.
YOUR MORTGAGE IS
NOT FINAL UNTIL THE MONEY HAS BEEN TRANSFERRED. IMAGE SOURCE: GETTY IMAGES.
a lender decides whether to give you a mortgage, it looks at your ratio of debt
to income. If you take out a loan for another major purchase -- say, a car --
you change that ratio substantially. Paying cash won't prevent a mortgage
snafu, either, because your lender will see the sudden hit to your bank
account, and lenders don't want you to be short on cash after making a down
if the purchase isn't enough to prompt the lender to deny your mortgage, it
could lead to higher borrowing costs. It's possible your lender may change the
terms of your mortgage, handing you a higher interest rate because you've taken
on more debt or lowered your assets before your loan closes.
amount of income you have coming in is one of the key factors banks consider
when determining whether you qualify for a loan. Generally, you have to provide
two pay stubs to prove your income, but if a closing gets pushed back, your
lender may ask for continued proof of employment.
if you have an offer for a better job and would simply be trading one income
stream for another one, it's always best to ask your lender before making a
move. In the case of a job switch, you may need to provide an offer letter, and
your new employer may have to verify your start date and salary.
factor in whether you qualify for a loan to buy a home is how much credit you have
available to you. There's a sort of "sweet spot" where your lender
will believe you have enough available credit but not so much that you can run
up debt that will impact your ability to pay your mortgage.
addition, opening a credit card requires a credit check. That can lower your
credit score, which your lender may continue to monitor through your closing.
my wife and I bought our current home, before we closed, I received a fairly
significant payment from a company I then owned a piece of. Given that it was
money coming in, not going out, it was generally viewed as a positive by our
lender, but it still needed to be explained.
had to prove that the money was earned and was not a loan of any type. That's
because the mortgage company does not want anyone making a down payment with
money that must be paid back. That's why any non-paycheck income should be
declared and explained, as should any expenditure that's outside the norm.
addition to your pay stubs, your mortgage lender will ask for bank statements
-- usually 90 days' worth. If your mortgage closing gets delayed, the lender
may want to see new statements as they come in.
get ahead of yourself
while you wait to close on a house, consider your finances to be in a state of
suspended animation. Don't do anything that changes the picture your potential
lender sees. Even a move as small as getting a store credit card from a home
improvement store -- something many new homeowners do -- should wait until
after you actually own the house.
that the most important thing is closing on the house and owning your new home.
Everything else can, and should, wait.
Daniel B. Kline - To view the original article click here