Buyer Do’s & Don’ts: Tips for a smooth loan approval
Here is a list of helpful tips to ensure an effortless loan process. These does and dont’s will help you avoid any delays with your loan approval. If you encounter a special situation, it is best to mention it to us right away so we can help you determine the best way to achieve your goals.
Do
- Continue making your mortgage / rent payments
- Stay current on all existing accounts
- Keep working at your current employer
- Keep that same insurance company
- Continue living at your current residence
- Continue to use your credit as normal
- Call us if you have any questions
Don't
- Make a major purchase car, boat, jewelry, etc.
- Apply for new credit even if you seem preapproved
- Transfer any balances from one account to the other
- Pay off charge-offs without a discussion with us first
- Pay off collections without a discussion with us first
- Buy any furniture
- Close any credit card accounts or consolidate your debt
- Change bank accounts
- Max out or overcharge on your credit cards
- Take out a new loan
- Start any home-improvement projects
- Finance any elective medical procedure
- Open a new cellular phone account
- Join a new fitness club
- Pay off any loans or credit cards without a discussion with us
Loan Application Checklist
In general, the documentation you will need includes:
- Check for appraisal fee
Property Information (if you already have a contract on a house)
- Purchase Agreement.
- Copy of legal description and MLS sheet.
- If you are selling your current home, copy of listing contract.
- If you have sold your current home, copy of settlement statement (HUD-1).
Income & Assets
- Pay stubs for the last 30 days.
- Statements for each bank, mutual fund, and/or investment account for the last three months – with all pages.
- Estimated value of personal property.
For the past two years:
- Names and addresses of each employer.
- W-2s
If you have made any large deposits to your accounts:
- Explanation and source for deposit.
- If large deposit was a gift:
- Signed gift letter (we will supply).
- Copy of gift check.
- Copy of deposit receipt.
If you own more than 25% of a business:
- Corporate or partnership tax returns.
If self-employed:
- Tax returns for the last two years (with schedules).
- Year-to-Date Profit and Loss Statement prepared by an accountant.
If you own rental property:
- Tax returns for the last two years and current rental agreements.
If you are retired:
- Pension Award Letter.
If you receive Social Security:
- Social Security Award Letter.
If you are counting child support as income:
- Copy of divorce settlement.
- Copy of twelve months of cancelled child support checks.
Debts
- Names, addresses, account numbers, balances and monthly payments on all current loans.
- Explanation of credit report anomalies, including:
- Late payments, credit inquiries in the last 90 days, charge-offs, collections, judgments and/or liens.
- Bankruptcy filed within last seven years (bring a copy of your bankruptcy papers).
VA Loans
- Copy of DD Form 214, Report of Separation.
Miscellaneous
- Photo ID and proof of Social Security number.
- Residence addresses for the past two years.
- If applicable, a copy of your divorce decree.
- If you are not a citizen, a copy of the front and back of your green card.
