Wednesday, June 23, 2010

7 Steps To Keep Your Illinois Mortgage Approval Intact

Purchasing a new home is exciting! You just got pre-approved, you then found your home, and are now getting ready to go to your closing. Before you close however you need to be sure you don’t create any possible snags that could hold up your closing.

Here are the 7 steps to keep your Illinois mortgage approval intact:

Step 1: Your Credit Report
Make sure your credit report is accurate and up to date. Anything that is wrong or missing could affect your loan closing. It could take up to 90 days for such info to be cleared so review it thoroughly . Sometimes a simple adjustment to your credit can improve your score by 20 points or more and improve your rate by .25%.

Step 2: Financial Documents
With these new guidelines, you may be asked to show your up-to-date financial documents so be sure to keep the following handy:
  • Pay stubs covering the last 30 days
  • W-2’s for 2008 & 2009
  • All Pages and schedules of 2008 & 2009 Federal Tax Returns(If self employed)
  • Statements for the last month on all investments (checking, savings, stocks, 401K, etc.) ALL PAGES!
  • Copy of mortgage statement (all loans)
  • Copy of your most recent tax bill
  • Copy of your homeowner’s insurance bill
  • Name and phone number to your Homeowners Association and documentation of the monthly payment (if applicable)
  • Copy of drivers license
Step 3: Paper Trails
Potential home buyers who can make a house payment with no problem sometimes can't buy a house because they don't have the funds required for a down payment and closing cost’s. This is when gift money may come into play. When receiving a gift your lender will need a paper trail back to how you received that gift. The same goes for large deposits made to your account. If it is not consistent with your normal deposit pattern it could raise red flags.

Step 4: Moving Assets
Do not move any money or funds around. When you initially submitted your documents, the lender has reviewed them and knows exactly where they are. If you start moving things around it will cause headaches, for at closing they must verify those funds. If they can’t find the money you initially reported then all it will do is hold up your loan. Ask your loan officer in advance before you move any assets.

Step 5: Statements
When getting your approval you lender may ask for statements such as credit card statements, bank statements, pay statements. Just as we mentioned with your financial documents, keep them handy!

Step 6: Employment
If you are either changing jobs on your own or are forced out of your employment, you must inform your lender at the moment it happens. If you don’t it would not only get your loan denied on the spot but you would be committing fraud. If you don’t have a job, you cant pay your loan back.

Step 7: Credit Cards and New Purchases
Let’s say you just got pre-approved for a new home loan and begin shopping at a few home stores and begin making larger purchases to furnish it. This is where the trouble begins. Fannie Mae has just implemented new guidelines on June 1, 2010 to require lenders to pull a 2nd credit report right before closing. This is trouble for you the borrower because when your lender initially pulled your credit from your loan application, that credit is how they qualified you to receive that rate. Now when the lender is required to pull that 2nd credit report, the new debt will show and affect your rate and your credit could drop, possibly getting your loan denied. Buy your new home supplies once you have closed and all will be fine.

If you follow these 7 steps then you will keep your Illinois mortgage approval intact and will be clear to close! If you have any further questions on these items please give us a contact United Home Loans at (708) 531-8388.

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