While you are considering the purchase of a new home or exploring new financing on your current home, you should not do anything that will have an adverse effect on your loan from this point through the rest of the process. The key is to call your First Liberty Bank loan officer if you wish to make any changes to your financial picture; even the most logically beneficial moves can backfire and cost you thousands of dollars or even your ability to obtain financing at all. To have your pre-approval remain valid please pay close attention to the DOs and DON'Ts below:
#1: DO STAY CURRENT ON EXISTING ACCOUNTS.
Pay your bills on time! Late payments on your existing mortgage, car payment, or anything else that can be reported to a CRA (Credit Reporting Agency) can cost you dearly. Make your mortgage payments on time but call us before you make any payments that are scheduled within two weeks of closing.
#2: DO CONTINUE TO USE YOUR CREDIT AS YOU NORMALLY WOULD.
Red flags are easily raised within the scoring system. If it appears you are diverting from your normal spending patterns, it could cause your score to go down. Again, make your changes after the loan funds.
#3: DO CALL YOUR FIRST LIBERTY BANK MORTGAGE CONSULTANT.
If you have any questions during the loan process, we are here to help and we are just a phone call away.
#1: DON'T APPLY FOR NEW CREDIT OF ANY KIND.
You receive invitations to apply for new lines of credit almost daily; don’t respond. If you do, that company will pull your credit report and this could have an adverse effect on your credit score. Likewise, don’t establish new lines of credit for autos, furniture, appliances, etc.
#2: DON'T PAY OFF COLLECTIONS OR CHARGE-OFFS.
Don’t pay off collections, charge-offs liens, judgments, or any derogatory credit unless we specifically ask you to in order to secure the loan.
#3: DON'T MAX OUT OR OVERCHARGE EXISTING CREDIT CARDS.
Running up your credit cards is the fastest way to bring your score down and it could drop up to 50 points overnight. Once you are engaged in the loan process, try to keep your credit cards below 30% of the available limit.
#4: DON'T CONSOLIDATE DEBT TO ONE OR TWO CARDS.
Once again, we don’t want you to change your ratio of debt to available credit. Likewise, you want to keep your beneficial credit history active.
#5: DON'T CLOSE CREDIT CARD ACCOUNTS.
If you close a credit card account, it can affect your ratio of debt to available credit which could have a 30% impact on your credit score. If you really want to close an account, do it after you close your mortgage loan.
#6: DON'T RAISE RED FLAGS TO THE UNDERWRITER.
Don’t cosign on another person’s loan, or change your name and address. The less activity that occurs while your loan is in process, the better.
#7: DON'T MAKE ANY ADJUSTMENTS OR TRANSFERS IN YOUR ASSET PICTURE.
Don't change investments, move positions, close accounts, open new accounts, transfer funds between accounts, or substantially change your asset picture without talking with your First Liberty loan officer first.
#8: DON'T MAKE LARGE UNEXPLAINABLE DEPOSITS INTO BANK ACCOUNTS.
Deposit amounts exceeding past history will be questioned by an underwriter unless the deposit is a documented gift.
#9: DON'T EXPECT TO USE CASH FOR YOUR DOWN PAYMENT.
Cash is an unacceptable form of funds because its source cannot be traced.
#10: DON'T MAKE CHANGES WITH YOUR EMPLOYMENT OR INCOME.
Employment stability is a big factor in the underwriting loan process. Quitting or changing jobs or even positions within the same company can greatly endanger your entire loan approval. INFORM US IMMEDIATELY OF ANY CHANGES TO YOUR JOB, POSITION, OR INCOME.