When you are preparing to apply for a mortgage, there are several things that you should know. At Indigo Mortgage, we call it “The 10 Commandments of Applying for a Mortgage”. It’s actually one of the most popular items on our website. Today, we won’t go through all 10 of the commandments but let’s highlight a few.
Avoid New Credit During Mortgage Application
The #1 commandment is thou shalt not take out any new credit while in process of a mortgage. This means do not buy a car, buy furniture, or take out a new credit card– no new credit until your mortgage closes and funds.
The Importance of Job Stability During Loan Application
The second commandment is thou shalt not change jobs in the middle of a loan application. Believe it or not, this happens and it can cause the loan to be denied or at the very least, it will cause major delays in the closing.
Why Cash is a Problem for Down Payments
The third commandment is thou shalt not use cash as your down payment. Cash is a killer in the mortgage business. Because it raises questions about where it came from and if it has to be repaid, among others, it creates a lot of questions, and that means problems for you as a borrower. Mattress money, money in the safe, or large cash deposits are not acceptable, due to anti-money laundering laws. Talk to your loan officer if you are planning to use any cash as a form of down payment, as you don’t want to find out just before closing that it won’t be accepted.
Again, these are just a few of the 10 commandments of applying for a mortgage. If we can assist in the purchase or refinance of your home, give us a call.