Mortgage Tips from Stu Greenbaum of Atlantic Home Loans

The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. Any blip in income, assets, or credit should be reviewed and executed in a way to keep your application in the most positive light. Here are some great tip’s to help insure your loan gets approved.

1) Don’t deposit cash into your bank accounts

Lenders need to source your money, and cash is not really traceable. Small, explainable deposits are fine, but getting $10,000 from your parents as a gift in cash is not. Discuss the proper way to track your assets with your loan officer.

2) Don’t make any large purchases, like a new car or new furniture.

New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt ratios…higher debt ratios make for riskier loans…and sometimes qualified borrowers are no longer qualifying.

3) Don’t co-sign other loans for anyone

When you co-sign, you are obligated. With that obligation come higher debt ratios, as well. Even if you swear you won’t be making the payments, the lender will be counting the payment against you.

4) Don’t change bank accounts

Remember, lenders need to source and track assets. That task is significantly easier when there is a consistency of accounts. Frankly, before you even transfer money between accounts, talk to your loan officer.

5) Don’t apply for new credit

It doesn’t matter whether it’s a new credit card or a new car, when you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

6) Don’t close any credit accounts

Many clients have erroneously believed that having less available credit makes them less risky and more approvable. Wrong. A major component of your score is your length, depth of your credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

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