Uncategorized December 21, 2020

The Do’s and Don’ts after Applying for a Mortgage

The Do’s and Don’ts after Applying for a Mortgage | MyKCM

Once you’ve found the right home and applied for a mortgage, there are some key things to keep in mind before you close. You’re undoubtedly excited about the opportunity to decorate your new place, but before you make any large purchases, move your money around, or make any major life changes, consult your lender – someone who is qualified to tell you how your financial decisions may impact your home loan.

Below is a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.

1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender. Lenders need to source your money, and cash is not easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Higher ratios make for riskier loans, and then sometimes qualified borrowers no longer qualify.

3. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you’re obligated. With that obligation comes higher ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

4. Don’t Change Bank Accounts. Remember, lenders need to source and track your assets. That task is significantly easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

5. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

6. Don’t Close Any Credit Accounts. Many buyers believe having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

mortgage lendingmortgage loansSeattleSeattle Eastside February 25, 2016

You Get What You Pay for in a Lender

Does the lender you choose make a difference in this market?  Oh yes, my friends, it certainly does. Multiple offers happen often here in the Seattle area and the lender you choose can help you get your dream house, but it can also make your offer less desirable if your lender does not have certain qualities.  Even when you are not competing for a home, a lender can make the home-buying experience feel like a piece of pie (I like pie more than cake), or like driving a bus with 40 cranky kids when it’s a full moon.

I have had both experiences with lenders and 98% of how well the deal goes is based on the following:

1. Is the lender local?  In my neck of the woods (Seattle eastside), it is important to choose a local lender for a few reasons.  We are having an inventory crisis which leads to multiple offers.  When you are competing for a house the highest price is not always the winner.  I coach my clients that having a local lender allows for everyone to be in the same time-zone which is important for time-sensitive documents to get to where they need to be in order to close on time.

Local lenders also use appraisers from a group that specifically works in the area your house is in.  I have had appraisers assigned by an out-of-state lender come from an hour away.  They don’t know the area at all and can possibly appraise the home incorrectly.

Lastly, if you find a good one in town, communication is much easier.  I have called out-of-area lenders and they don’t know who I am and they barely know my clients.  Getting emails or calls returned has been a pain in the donkey. As the real estate broker, I always call the lender and if I have troubles getting in contact with them or receiving a response to an inquiry, more often than not they are out of town lenders.

Which leads to the next point:

2. Does the lender communicate efficiently? Oh my word, I cannot emphasize this enough.  When you call or email, how long does it take for the lender to respond?  It shouldn’t take days; it shouldn’t even take hours.  The lender I refer to my people will respond to you within 30 minutes (see Rodney Coulombe’s contact info below). A lender should not make you be a stalker to get your questions answered.  It’s their job to give great customer service (and Rodney is the best at this.)

In addition, a great lender will clearly lay out all of the products for which you qualify.  That awesome rate you saw in the paper or online?  Often, those get you to call in and then mysteriously you can’t get that rate.  These are the lenders that are always the hardest to talk to once you have agreed to work with them.  Great lenders don’t have sneaky tactics or “special rates”.

Find a lender that makes you feel like you are their only client.  When I started working with Rodney, that’s how I felt and I wondered if he was just starting out or didn’t have much business.  I was so very wrong… Rodney is just that good. Find yourself a Rodney or call him yourself (see below).

Rodney Coulombe

O: 425.449.5310 | M: (206) 915-7042 | F: 866.743.3080

rcoulombe@rpm-mtg.com

www.rpm-mtg.com/rcoulombe

3. Does the lender have a good reputation with your real estate broker? We work with many lenders on both sides of the real estate transaction.  As the Listing agent, I advise my clients to look at the lender as part of the decision process.  If a Buyer makes an offer with a “big box” bank (think Wells Fargo, Bank of America), their offer will be less desirable than the offer with a local, smaller lender who can give us their focus and attention.  Larger lenders have much more on their plate and, I have found, don’t give the clients the focus that is needed to get probably their largest investment closed on time and without penalties.

My colleagues and I know the ones with the great reputations and we know that those are the ones that will help you win in a multiple-offer situation as well as make the process roll smoothly.  That’s worth the dough (and pie!) in my opinion.

I have clients who kick themselves for focusing on the “cheap rates” at the beginning, because in the end they always get what they paid for: a lender who was impossible to get ahold of and/or who couldn’t close the deal on time (or cut it so freaking close) due to the fact they were too busy or the time difference bungled the deal.