Did you know that your mortgage lender reserves the right to decline your mortgage even after you have been approved?! Few people know this but the mortgage approval you sign whether you are buying or refinancing is simply a conditional mortgage offer. If there are ANY changes between the time you signed the approval, to the time the mortgage funds, the lender reserves the right to cancel.
Please speak with us BEFORE you consider making any financial changes. Not doing so can and will result in a mortgage decline and possibly leave with you financial damages.
1. Do Not Make Changes To Your Employment
If you quit your job, change positions, hours, or income, you must advise us. Lenders often perform what’s called a “post audit review” of your file right before the funding date. If they request another pay stub or call your employer again to verify your employment details, and discover any changes, you may no longer qualify and the lender will cancel your mortgage approval. Yes, they can do this.
2. Do Not Apply For Any Type Of Credit Or Loan
Refrain from applying for credit, co-signing on a loan, or taking out a new loan for yourself. These changes do change your debt to income ratios and can disqualify your mortgage.
3. Do Not Increase Your Credit Balances
Similar to point #2, any increase in debts can throw off the debt service ratios (allowable debt in relation to income) and void your mortgage approval.
4. Do Not List Your Home For Sale
If you are refinancing especially, do not list your home for sale until the mortgage has funded. Major lenders avoid mortgaging homes which are listed for sale. The reason being that they would not recoup the costs incurred to originate your loan if the home was sold only a month or so after the mortgage completed.
5. Do Not Compare Your Mortgage To Others
Every single mortgage application is different and has been specifically tailored to your unique circumstances. Just because your friend or co-worker was given “x” doesn’t mean that you should get the same. Rely on your licensed independent Mortgage Advisor for unbiased advice on your particular loan structure.
If after your mortgage completes and you still want to make changes as outlined above, go ahead and do so. Of course, we still encourage you to borrow responsibly but your mortgage lender can no longer fault you for a change in job, income, or debts.
For any clarification, please contact us directly and we will be happy to help.