Tuesday, February 5, 2008

Here are the don't do's they never tell you about

Ever notice that all the advice you read is like a big "to do" list? Well here's a list of "don't do's" that are equally important:
1. Don't believe everything you hear, especially from family & friends (everyone you talk to thinks that they're a mortgage expert). Just because somebody got a cavity once doesn't mean they are a dentist - right ? Same thing is true with mortgages
2. Don't apply for new credit cards or loans - you'll have plenty of time to do so after you move in!
3. Don't open a "don't-pay-for-a-year" account - most lender policies mean that they will input a phantom payment on that debt which may mean your maximum qualification is affected due to lower credit score or higher debt load
4. Don't guarantee or co-sign a loan or mortgage for anyone else - again, that other payment is included in YOUR debt load as far as the bank is concerned which means you may qualify for less money on the mortgage
5. Don't stop paying your bills (including your current mortgage) - just because you are approved today doesn't mean you can suspend all your other payments
6. Don't spend part (or all) of your down payment on other things - there are rules that lenders go by to determine your downpayment money is properly accumulated and accounted for in order to get your low interest rate
7. Don't let the value of your investments slip below the amount you need to "close the deal"
8. Don't wait until the last minute to provide proof of your down payment
9. Don't pack documents that may be required to verify income or down payment - keep a "mortgage" folder or envelope separate from your packed documents and clothes
10. Don't make large deposits to your bank account (unless you're prepared to provide an explanation with supporting documentation)
11. Don't underestimate your closing costs (your lawyer, notary or mortgage consultant can help you with this) - all costs and adjustments are paid on closing day, no loans or I.O.U.'s !
12. Don't forget to ask your lawyer or notary about property tax adjustments - no need for a surprise scramble to come up with more money on closing day
13. Don't quit your current job - the lender may make a decision to provide financing based on the stability of your employment so a change after the fact may mean approval is cancelled
14. Don't change the status of your employment from full-time to part-time - same as above
15. Don't change your closing date without telling your mortgage consultant - a courtesy of course but also as the "quarterback" of the proceedure they also inform all others in the transaction of important information ... if certain work is done for no reason because of your silence you may get billed for it!
16. Don't neglect to satisfy all outstanding conditions of your mortgage approval - the lender doesn't care that you were too tired or too busy to send in required documentation, it's their money that you are borrowing remember
17. Don't wait until the last minute to arrange for home insurance - you need to know that your home is actually insurable or at least have time to get issues resolved before issuance of insurance
18. Don't ignore telephone calls from your lawyer, notary, real estate representative or mortgage consultant - they are always working for you so why not help yourself in the end ?
Visit Spencer Group Mortgages to find out more or get more clarification on these or other questions.

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