Here are some

Common Mistakes Even Savvy Borrowers Make

1. Job changes. If you are changing companies during the loan process, be sure to disclose this. The lender will be verifying your employment prior to funding the loan. Depending on your loan program lenders may require paystubs from your new job.

2. Leaving town for business or vacation. If you plan to be out of town during any part of the process, please let us know. You will need to be available to sign and notarize the final loan documents. We can plan around the time you are away, have you sign at a location where you will be, or have a power of attorney prepared before you leave. The important part is to know before you go so we can plan accordingly.

3. Not disclosing ownership in other businesses or properties. The lender will be researching your name against various sources and will likely discover ownership.

4. Property issues. You must have your water heater double-strapped, and smoke and carbon monoxide detectors installed. If you have an unpermitted addition or in-law unit please, let me know, as some lenders won’t approve this. Additionally, any health and safety issues that the appraiser discovers must be repaired, for example, broken windows, exposed wiring, etc.

5. Solar panels. Solar energy panels are becoming more and more popular but they may pose an issue when it comes to financing. Please let us know if you have solar panels.

6. HOAs. If you live in an HOA, please disclose any litigation or issues you are aware of.
7. Opening new lines of credit or loans. The lender will run a soft credit check prior to closing, so if you make a large financed purchase while applying for a mortgage, we will need to provide the lender with details of the financing so they can include the additional debt.

8. Provide ALL pages to documents. Any documents provided to the underwriter must be complete. Please provide all the pages to any documents even if they are blank.

9. Large deposits. Current guidelines state that any deposit over 50% of your income must be explained. An underwriter can call for additional deposits to be explained if they have questions. Deposits must be sourced with a letter of explanation and proof of deposit such as a copy of the check.

10. MOST COMMON MISTAKE: Source of funds. When buying a home, the lender will want to know from which accounts the down payment is coming. All funds in the transaction will need to be documented. When bringing in the wire or cashier’s check, make sure it’s from one of the accounts provided, and does not exceed the amount shown on the last statement. If you transfer funds from one account to another, complete the transfer, and then we will need to show the transfer out of one account and into the other. This can be cumbersome if you have multiple accounts. Avoid combining accounts. Instead, wire in the money directly from each individual account. If gift funds are to be used, they need to be disclosed prior to closing. The donor will need to provide a specific gift letter. If you have questions about funds to close, don’t hesitate to ask, as this is the most common condition that comes up last minute.
It’s always better to know up front and prepare, than get hit with a surprise that postpones the closing!