This year we announced our partnership with Alterra Home Loans as our preferred lender. With this partnership we can offer innovative products, amazing technologies and work to make the complex mortgage process as simple as possible for all our clients and partners alike. Together we can expand our mission of building wealth through home ownership.
“Today the mortgage process is more than just providing our clients with a quality experience, that’s a given. Our One Team concept with Alterra Home Loans is also focused on helping Award agents generate more business.” - Phil Romero
In this blog we had the pleasure to hear from our friends at Alterra Home Loans about the 10 Golden Rules when applying for a mortgage loan.
#1 Don’t change jobs or become self-employed
Changing jobs is not a problem if it’s in the same line of work but it does pose a challenge when requesting verifications of employment to the new employer to verify the buyer’s job title, start date, pay rate, etc. Becoming Self-employed is a problem since guidelines require us to have a 2-year history of being self-employed.
#2 Don’t buy a car, truck, or van unless you plan to live in it
Buying a car will likely increase the borrower’s monthly debt and may cause the borrower’s total monthly liability to exceed qualifying guidelines.
#3 Don’t use your credit cards or let your payments fall behind
Credit cards – same with buying a car. It may increase the borrower’s monthly debt. Falling behind in payments may lower the credit score to a point where the borrower doesn’t qualify for the particular loan program – loan programs have minimum credit score requirements.
#4 Don’t spend the money you have saved for a down-payment
Using the cash designated for the down payment may cause the borrower not to qualify – either due to the minimum down required for certain programs or we don’t have enough cash to close escrow.
#5 Don’t buy furniture before you get the keys to the house
Buying furniture is the same as item #3, if using credit cards to buy the furniture. It can also be the same as #4 if they use their cash to buy the furniture.
#6 Don’t apply for any new credit cards
Applying for credit cards may lower their credit scores due to the new inquiry or if they charged something to the new card.
#7 Don’t make any large deposits into your bank account
Large deposits – we need to document where the cash came from when we see large deposits. If it’s a gift from someone, or a tax refund, or something else that we can document then we are fine. We need to show that these large funds do not have to be paid back to anyone or if it is a loan. If it is a loan, then we need to document the terms of repayment and then add that monthly payment - which could possibly disqualify the borrower if their monthly debts exceed allowable guidelines.
#8 Don’t change bank accounts
Changing bank accounts or opening new accounts – we need to document the source of funds.
#9 Don’t co-sign for anyone
Co-signing for someone else is basically taking on the liability for this new debt. Like item 2, 3 and 5…it can increase the debt. Also, if the other person doesn’t make their payment, it will show up on your credit report.
#10 Don’t purchase anything until you get the keys to your house
Same as #2, #3, & #5.