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10 Commandments during the Mortgage Process

Someone emailed me this list, so I don’t know who to give credit to.  I think all real estate buyer’s agents should provide
this to any prospective home buyer’s before doing business.

1. Thou shall NOT change jobs, become self-employed/commissioned or quit your job.
Paystubs are needed covering a 30 day period at your present job. If you leave a
salaried job and become self-employ/commissioned you would typically have to
wait 2 years. Employment verifications are always done within five days of

2. Thou shall NOT co-sign a loan for anyone. Any changes to your credit report or status
could negatively affect your ability to close your loan. Co-signing any type of
car loan, student loans or other loans will result in inquiries to your credit
and additional financial obligations.

3. Thou shall NOT buy a vehicle. Applying for credit to purchase a vehicle will result in
an inquiry to your credit report. This will decrease your score, decrease the
amount of money you can qualify to borrower and make it more expensive to do

4. Thou shall NOT use charge cards excessively or make ANY late payments. Excessive use
of credit cards can have negative effects on your score. Inquiries alone may
lower it and balances greater than one third of the available credit limit can
also lower your credit rating. Any late payments will lower your score
significantly regardless of the amount due.

5. Thou shall NOT spend money you have set aside for closing. Having enough for down
payment and closing costs is critical, but so are reserves after closing.
Spending this money prior to closing could result in a denial.

6. Thou shall NOT omit debts or liabilities from your loan application. Be very honest
about all of your debts and liabilities early on in the loan process. Everything
is checked and double checked, so they will likely turn up at some point and
jeopardize your loan.

7. Thou shall NOT buy furniture, appliances or household items before closing. Large
purchases causing deductions in your bank account, inquiries on your credit
report or additional debt on your credit cards could cause your closing to be
delayed or denied. You must wait until after you close.

8. Thou shall NOT originate any inquiries into your credit. As mentioned before, multiple
inquiries on your report will decrease your score. Credit is always refreshed
within 7 days prior to closing and inquiries will result in more documentation
being required which may delay your closing.

9. Thou shall NOT make large deposits without first checking with your lender. Abnormal
deposits or large deposits other than regular payroll into checking, savings or
any financial account must have sources verified and will result in more
documentation being required.

10. Thou shall NOT pay off any collection accounts or charge offs prior to closing.
This will most likely decrease the credit score immediately due
to the date of last activity becoming recent. If you want to pay off old
accounts, do it after closing and make sure that you validate that the debt is
yours and that the creditor agrees to give you a paid in full or even a letter
of deletion.


November 14, 2011 - Posted by | Uncategorized

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