Financial documentation is vital when applying for mortgages

The home buying process typically begins with preapproval for a mortgage loan. In order to get preapproved, you will have to provide your employment and other income information to your loan officer. The lender will also check your credit report to determine if you qualify for a loan and, if so, how much money you are eligible to receive. While this step is important, every borrower must understand that this is not the only time this information will be verified. Most lenders, such as Village Mortgage, contact employers and run a credit report just before the loan closes.

In many cases, borrowers take significant steps to improve their credit before they apply for Mortgages. This often includes paying down credit card balances and taking care of old debts. If you have reduced your credit card balances in advance of your preapproval, you probably have a lot of available credit. It is important to resist the urge to make any major purchases between the day you get your preapproval and the day your loan closes. Increasing your debt also increases your risk and may affect the terms of your mortgage.

If you have any changes in your income while you wait for your closing, be sure to inform your loan officer. Unless it is absolutely necessary, don’t change jobs while your mortgage loan is pending. If it can’t be avoided, changes should be reported whether they are positive or negative because they both can affect your pending loan. Losing your job may not mean that you won’t be able to purchase the house if you are able to get another job earning a similar salary. You’ll need to give your loan officer the contact information for your new employer so they can run the final employment verification prior to your loan closing.

You will need to document the source of all deposits to your primary bank account. Before lenders make loans for Mortgages, they carefully review financial information and may request more information from you if you have unusual deposits or withdrawals from your account. Most borrowers only deposit their salary and pay their bills from their primary checking accounts before their loan closes.

Watch our video for more information.

Village Mortgage Company, NMLS #6331 CT #6331, RI #6331, ME #6331, Licensed Mortgage Lender NH #6331, Mortgage licensed lender in MA ML6331.

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