DO's and DON'Ts
While your Mortgage Loan is in Process…

Mortgage loans need to comply with lender guidelines, regulations and the whims of loan underwriters. Therefore, it's important to know up-front the things you should and should NOT be doing while your loan is in process. Here are the most important things:

  1. Bank & other financial asset statements: Due to Federal laws surrounding money laundering, lenders need to track "where the money came from" for large deposits made to the statements that you furnish to them. If a deposit that is usually larger than a payroll deposit suddenly shows up as a deposit to your account(s) on the statements you provide, the lender will want to see a paper trail of "where the money came from" (i.e., copy of the check, check stub, letter or other documentation from the originating source). Therefore:
    • Keep a paper-trail of these deposits and provide this documentation to your lender.
    • Make sure your individual deposits are NOT an un-acceptable deposit (un-secured cash advance on a Visa card or loan, cash, etc.) - these are not acceptable as part of funds needed for down payment, closing and prepaid costs for your loan.
    • Provide all pages of the asset statements. Lenders need to track all deposits and all withdrawals.
    • Check to be sure that your account balances show a beginning and ending balance covering at least a 30 day period and that they cover your most recent statement.
    • If providing Internet statements, be sure that they have your name on them and partial account number and that they have the name of the company on them.
    • If you anticipate receiving any money from sources other than your payroll while your loan is in process, it would be a good idea to call your lender so they can advise what documentation will be needed.

  2. Employment: If you change employers, your lender needs to be notified so that they can verify your current employment. Provide them with the name, address, and phone number of your new employer. They will also need a copy of your first pay stub from your new employer before your loan can close.
    • Do NOT change employers without first advising your lender and seeing if the change of employment/employers will affect your mortgage loan.
    • Do NOT get laid-off, quit work, or decrease your work hours.
    • Make sure your pay stub has your current earnings as well as year-to-date earnings showing on it, as well as the name of your employer printed on it.

  3. Credit: If you anticipate purchasing additional items on credit which will increase your monthly debt obligations or will otherwise affect your credit, your lender needs to be notified. If your credit report needs to be updated with this new information, it may affect the underwriting of your loan.
    • Do NOT make additional large purchases until after your loan closes.
    • Do NOT apply for new credit cards or purchase other items on credit, even items which offer deferred payments.
    • Do NOT make any late payments on any of your accounts.
    • Do NOT allow any items you dispute become collections, charge-off's or other derogatory information on your credit report.

  4. Other Changes to your Life: If any of these events occur, please advise your lender.
    • If you plan on a divorce or separation.
    • If you begin receiving child support or alimony payments or expect to.
    • If you plan on filing for bankruptcy, foreclosure or become involved in a lawsuit or other litigation.

While you may agree that most of these items are "common sense", it never hurts to review the list just to be sure that purchasing your new home (one of the largest purchases of your entire life) will go smoothly.