The do’s and don’ts of mortgages script help borrowers provides information for a borrower to follow that will not only help them, but help you too.

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This is Michael Anthony O’Connor with Community Home Funding and in this video I am going to share the do’s and do not’s of mortgage loans.

If you are one of the eighty-six percent of home buyers who will require a mortgage loan to purchase a home, the process of getting approved for a mortgage may seem intimidating. There are a number of things that you can do to improve your chances of being approved for a mortgage. Let’s take a look at what you should do.

1. Get pre-qualified

The first thing you should do is get pre-qualified. This way you will know how much you can afford to pay and aren’t heartbroken to learn that the home fell in love with is way out of your price range. Getting pre-qualified also makes your purchase offer stronger since it indicates that you have already started working with a lender and that you are able to come up with the money you have promised to pay.

2. Make on-time payments on all your accounts.

The next item you want to make sure that you always do is make your payments on time. Your lender will look at all of your debt as an indicator of how you pay your debts. It is important to remain in good standing with your creditors while you are waiting for loan approval.

3. Submit every single document your lender asks you for.

You will be asked for bank statements, pay stubs, and tax returns among other documents. Make sure to turn these in and do so in a timely manner. If your lender asks you to resubmit a document, please do so. Although it may seem frustrating, the lender has a reason for requesting these documents and failing to produce them could delay approval or even result in a loan denial.

Just as there are several things that you should do during the home loan process, there are also a number of things that you should avoid at all costs when applying for a mortgage loan.

Do not take out any other loans or make any large purchases while waiting for the loan approval. Your lender will pull your credit score one last time before you get final loan approval and seeing a decrease in the score or a decrease in the amount of credit you have available may cause your loan to be denied. Large purchases, especially if made using credit can lower your credit score and effect your debt-to-income ratio.

Of course, sometimes things happen. Let’s say your car breaks down and you have to make unexpected repairs, let your lender know the situation in advance. They may be able to work around the situation if you provide documentation and a detailed explanation of the circumstance.

Don’t make any changes in your employment. The time to switch career paths is not in the months leading to a home purchase. It is also not wise to reduce the number of hours you work. Lenders will want to see multiple pay stubs to ensure your income is consistent and that they can rely on you to make your monthly payment and making major changes can make you look like an unreliable borrower.

Don’t make large cash deposits into your bank account. This one sounds a little funny, but lenders need to be able to document where all funds for your down payment and earnest money deposit come from. If you receive a large amount of money as a gift, you will need to provide a letter explaining where the money came from and will also have to prove that you are not reliant upon this money to pay your bills.

Lastly, don’t be afraid to ask questions. The process of buying a home and getting a mortgage loan is a big deal and can be confusing or overwhelming. If you want your lender to update you on the status of your loan, ask them. If you aren’t sure what a certain fee is for or what an acronym stands for, reach out to your lender for an explanation. Be assured that you aren’t bothering them, they will probably appreciate you keeping the lines of communication open and staying on top of things.

Getting a mortgage doesn’t have to be complicated or scary. Your lender is there to help you along the way and always remember to ask questions.

Thanks for watching.