TEXAS: Every time we send a mortgage “pre-approval” letter, we also send an accompanying list of suggested actions to avoid. We call it our “Don’t List”. This list is essential to prevent borrowers from creating a lot more work for themselves or from jeopardizing their pre-approval status altogether.
Below is our don’ts for pre-approved borrowers: .
- Do NOT make large deposits that cannot be explained. All “large deposits” must
be explained and/or “paper-trailed.” Deposits as small as $500 that are from
mattress money, untraceable foreign bank accounts, or cash payments of any
kind can render an entire bank account invalid and unusable for qualifying. If
you need to make large deposits that are difficult to “paper-trail”, contact us for
“coaching” or advice. Keep a paper-trail for every large deposit you make.
- Do NOT take on new debt. If you increase credit card balances or finance a
vehicle, your debt ratios will be adversely impacted, reducing your maximum
purchase price (or worse yet, killing ANY deal entirely)
- Do NOT take days off if paid “hourly.” If your debt ratios are “tight,” even a
single day off work can push you out of your qualifying range.
- Do NOT get a job in a “different field.” A job change in the same field is OK, as
long as the compensation is the same or higher. A job in a completely different
field will require six months or more of seasoning.
- Do NOT liquidate assets. This seems obvious, but we often need those assets for approvals. So please hold off on major repairs and purchases.
- Do NOT miss payments on any debts reporting on a credit report. This is obvious; missing any payments on your credit report will sharply reduce your credit score, and your qualifying ability.
- Do NOT co-sign for someone else’s debts. Even if you are just a “co-signer”, the debt will still show up on your credit report. You will be responsible for that debt and the payments (until we can show twelve canceled checks from the person making payments, usually).
- Do NOT file taxes with a tax liability owing, or with less income than in previous
years. File extensions instead. If you intend to file taxes between now and your
purchase date, consult with us if your debt ratios are considered “high” or