8 Costly Mistakes That Could Delay or Even Kill Your Deal…

If you follow these guidelines you will have a much better chance of getting approved and not delaying the close of escrow.

  1. Never take your own loan application. Many companies tell you to fill out an applicaition on their website or by mail. NEVER DO THAT. Always have a loan agent take it. If you put something on there you shouldn’t, the lender will not let you change it. Loan agents know what the guidelines are and you don’t. Especially helpful self loan takers can actually disclose too much that the lender is not asking for.
  2. Cash on hand is not allowed for down payments or deposits. Many borrowers are not aware that a personal loan from anyone is not allowed on a purchase transaction. If you are going to to use cash for a down payment from a friend, it has to be gifted from the friend or blood relative. If the person is a friend, you wil lhave to show a history of a long term relationship.
  3. Do not pay off a bunch of debt and use crucial money needed for your down payment before you talk to a lender. Let him or her coach you before you pay off debt.
  4. Job History. Stepping down to a lesser paying job is a big no no in the loan industry. If you are considering that, you should postpone it until you get your home. Switching from employed to self employed could also kill your deal , even if it is in the same field. If you have been employed for a long time, do not move to self employed before you buy a home. If you do, you will have to have been self employed for at least one year with great income. Do not retire in the middle of your transaction. If you are on an hourly wage and your hours have been sketchy over the last two years, it is important to have your employer write a letter that will “guarantee” 40 hours a week or ask if you can switch to a salary. If you do this, the lender won’t average your income for the past 2 years which can kill deals especially if you have had a poor former job or a lot less income from the year before.
  5. Large deposits in your bank account will have to be sourced as to where they came from. Selling personal property with no paper trail, especially if the buyer paid with cash will not be allowed to be used toward your down payment.
  6. Do not plan a vacation during your escrow. A Two week vacaton on a 30 day escrow will not give you enough time to close as your lender will not be able to get condtions from you if you are in another country or in the wilderness.
  7. Do not make big purchases in the middle of an escrow and try not to apply for new credit during an escrow.
  8. If you have low credit scores, that can certainly affect your approval and how difficult it will be. Scores below 680 conventional loans could be more difficult to get and scores below 620, the same for FHA. If your scores are affected by having too much debt (it will tell you the reason on the mortgtage report), your scores can be dramatically affected by paying down debt before the close of escrow or before you make an offer.

That is it! You are ready to go.

Ralph Migliozzi,

Broker Originator 

Serving Northern California 

NMLS 282851 DRE #01002038(p)

530-330-3073

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