Thursday, December 13, 2007

How To Help Guarantee Your Home Loan Closes Smoothly

When applying for a mortgage, there are many things you can do that will either lead to a smooth process and an enjoyable experience, or a very difficult process that leaves you frustrated and flustered over the whole thing. Because it is stressful enough that you are attempting to create the largest debt you will likely have in your entire lifetime, it is important that you know what things to do and what things not to do so as to assure yourself of as smooth, peaceful, and pleasant process as possible.

On that note, let's take a look at the top five things that will always create chaos and difficulty during the loan process that you need to avoid doing:

1. The borrower fails to respond in a timely manner to the lenders repeated requests for additional information or documents. The loan process can be time-consuming and tends to unveil problems only as things are moving forward. Don't slow things down by taking your time getting the items that the lender request. Make it your goal to have whatever that lender needs within 24 hours of when they ask for it.

2. The borrower makes large purchases with credit during the middle of the loan process. Debt-to-income ratios are crucial in determining what type of loan product or how small or big a loan you can qualify for. Don't alter your DTI ratio during the loan process by going out and buying a car or charging a room full of furniture on your credit card. You will be surely shooting yourself in the foot if you do. Hold off on any major spending until your loan is closed.

3. The borrower who is self-employed cannot find his tax returns or provide any evidence that he/she owns a legitimate company. These days, if you want a mortgage and you are self-employed, you must be able to produce your tax returns from the past 2 years. Because of the recent "subprime" implosion and the tightening lending guidelines of all major lenders, "no-doc" loans for the self-employed are rare. Have your tax returns ready and get them to your lender within 24 hours of the request.

4. The borrower goes out of town during the loan process and is unreachable by phone, fax, or e-mail to the lender.Sorry, but not the brightest of moves here. The loan process is a team effort between you and the lender. You are the one with access to the items the lender must have in order to process and close your loan on time. Don't take off for the beach or mountains and forget to at least leave a number you can be reached at. The best thing to do is to stay in town and save the trips until after the closing.

5. The borrower fails to tell the lender that he/she is responsible for child support payments to an ex-spouse. This is no laughing matter. Again, your monthly debts compared to your monthly income are going to be huge factors in determining the size of the loan you qualify for or even if you qualify for a loan. Dont' waste your time or your lender's time by forgetting to share all of your debt obligations as well as all of your sources of income.

Well, there you have 5 things you must make sure you avoid doing if you want to have a pleasant mortgage experience. Owning your own home is one of the great pleasures in life. Do yourself a favor and do the things during the process that will make it as easy on you and your family as possible. You'll be glad you did!

John N. Moneypenny

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