4 Mortgage Nightmares

Don’t let these happen to you!

Nightmare One: Surprise Debts

Joe was a successful business owner and a newlywed in his early-30s. He had no problem qualifying for a mortgage loan, his credit was excellent and he got the mortgage. But then Joe did a foolish thing. “He went out and bought a very expensive new car and didn’t tell his Realtor.  “All of a sudden, the day before settlement, the mortgage broker called and said, ‘We can’t do the loan.’ The recheck on the credit report showed a new $700 payment. He had to get his mother to co-sign for him, which was very embarrassing.”

 

The moral of the story? You shouldn’t take out new debts [during the mortgage process], no matter what.

 

Nightmare Two: Change Your Job

Bill was the family’s breadwinner, but after being pre-approved for a mortgage, he decided he could make more money by becoming self-employed. Problem is the mortgage lender refused to close on Bill’s mortgage because he had made a “material change” in his lifestyle and financial circumstances. Savvy Realtor’s will usually warn people ahead of time about changing jobs.   If they have to, they should always contact the mortgage professional and give them the details. If it’s a job in the same field, it’s usually not a problem. But if they were employed and think they’ll make more money by being self-employed, it could be a problem because they need a track record.

 

 

Nightmare Three: Pack It Up and Move It Out

Lenders often need financial information during the critical time between mortgage pre-approval and the closing or settlement. Unfortunately, that’s the same time when people are starting to move and pack away their valuable paperwork. “We’ve had plenty of people pack away the items they need. It happens all the time. If you’re doing a 30- to 45-day settlement, the approvals for your mortgage are going along that whole time, but people pack up and send their belongings on the truck if they’re moving out of state. Then the lender needs copies of bank statements and pay stubs for the last six months, or they want to see proof that a certain loan was paid off.” Best advice: Keep all of your important papers with you in a briefcase or somewhere you can easily find them.

 

Nightmare Four: Bad Credit

Many people have debts on their credit reports that they don’t even know about, but need to be corrected. That’s why it’s always a good idea to get a copy of your as soon as possible and apply early for a mortgage pre-approval. “I heard a credit nightmare; one couple tried buying a house for a full year.  They were in their own business and both had inheritances. Never in the Realtor’s wildest imagination did she ever think there would be a problem with that. They found a house and went for a mortgage, and they couldn’t get one. Their credit was so bad because they had not been paying their bills on time. They thought it was just natural to wait until they had the money to pay them. They did finally get a mortgage that was about 5% higher than the regular rate because of that. We recommend having your credit checked well before you find your home, at the beginning of the home-buying process when you first start house hunting, just to make sure there’s nothing you have to work on clearing up.

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.