Denver Home Living from Your Colorado Home Group Winter 2018 | Page 9

TEN WAYS TO
SCREW UP YOUR HOME LOAN
By Todd Huettner
G
etting a loan can be a long and frustrating process
even when you don’t have a complex situation.
While there are a lot of hoops to jump through,
people often cause their own headaches. Here is
a list of the most common self-inflicted wounds to avoid
before and during your loan process—you simply cannot
do any of these without FIRST contacting your lender:
out of, or between accounts. You will have to document
and verify all account deposits including account holders.
8. DO NOT: Sign any contracts or leases. You
have to count the payment on any new lease
or property even if you don’t own it yet.
9. DO NOT: Begin any home renovation or repairs.
Repairs always take longer than you think, and
they usually must be done to close your loan.
1. DO NOT: Have someone pull your credit for any
reason. You must explain and document any credit
inquiries; they can also lower your credit score.
10. DO NOT: Go on vacation or a work trip. In
many cases, you can close while out of town or
use a Power of Attorney, but not all the time.
2. DO NOT: Open or co-sign for any new credit accounts
including store cards. You have to document any new
accounts and include them in your debt calculations.
New lending rules require that lenders monitor your credit
activity. They even have to re-verify your employment right
before closing. Additionally, they may have to update other
documentation at any time up to the day your loan funds.
So, even after your loan is approved, you are not done.
3. DO NOT: Increase the balance on any loans or credit
accounts. You may have to include higher payments;
they can also really lower your credit score.
4. DO NOT: Change your employer or your
job. Depending on your situation, you may not
be able to include any of your new income.
5. DO NOT: Change your compensation from base to
commission or from W-2 to 1099. Even changes to how you
are paid can exclude your income from the loan calculations.
6. DO NOT: Make any major purchases like a car,
appliance, or furniture. Even if you don’t use financing,
you still need the required cash reserves after closing.
7. DO NOT: Deposit, withdraw, or transfer money into,
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I realize you can’t control all of
these things. It is also unrealistic
for you to not make deposits
or move money or go out of
town for work. However, you
must discuss these things
with your lender in advance
to avoid surprises. The reality
is that most of these issues
are not a problem if you plan
for them with your lender.