Health & Fitness
St. Louis Real Estate Market Buyer's Tips: Financial Tips You Must Know Before Applying For a Loan
There are common mistakes for many home buyers that lead to headaches and problems when getting a home loan. I have provided some financial tips to keep you on track!
Some of this may seem logical, but it all happens.
Tip #1: Don’t Move Money Around before applying for a loan. When a lender reviews your loan package for approval, one of the things they are concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts. If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.
The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious.
Perhaps you become exasperated at your lender, but they are only doing their job correctly. To ensure quality control and eliminate potential fraud, it is a requirement on most loans to completely document the source of all funds. Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document.
So leave your money where it is until you talk to a loan officer.
Tip #2: DON'T CHANGE YOUR BANK! Probably enough said.
Tip #3: Don't open new credit accounts for credit cards. This creates an inquiry on your credit report, which could result in a lower score. If there are too many inquiries into your credit history on your credit report, this could cause a red flag for the underwriters. Furthermore, you may be asked to pay off some of your current credit cards in order to qualify for a new loan.
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Beverly Taki is a Missouri-licensed real estate broker who has successfully represented clients for 25 years.
She is a broker salesperson at Keller Williams Realty St Louis. 10936 Manchester Road, St. Louis, MO 63122.
Beverly has earned a certificate in dispute resolution from Pepperdine University, specializing in negotiation and mediation.
Beverly Taki can be reached at beverlytaki@kw.com or 314-677-6366. Her website is beverlytakistlouis.com and her blog is realestatestlou.com.