St Louis Finance News: Consumers Need To Know The 3 Tips That Will Mess Up Your Mortgage Closing [News Hot Line: 877-334-0210 | Floyd Tapia]

You have found the home you always wanted. You sign a contract and then proceed to secure your lending.  Everything seems to be going smoothly until you get to the closing table.  You find out that it has been delayed and your frustrated.  Why has this happened to you and so many others?

In many cases, you may have changed your “borrower circumstances” between the day you applied for that St Louis home loan and the day you were suppose to close.

Due to the mortgage fiasco that has put this country into a deep recession, banks and mortgage lenders have gotten stricter as for as their requirements for lending.

Fannie Mae has been no exception to this rule.  This mortgage behemoth’s ‘Loan Quality Initiative,’ which went into effect June 1, requires all lenders to closely follow “changes in borrower circumstances” between the time of the initial application and closing.

Although this is nothing new in the mortgage arena, Fannie Mae has and will be enforcing them more vigorously.  For consumers, it could very well mean delays that could otherwise screw up a perfect mortgage closing.

David Adamo, CEO of Luxury Mortgage of Stamford says:  “Any change in circumstance could affect and delay a borrower’s closing on a transaction.”

So, here are 3 areas where a borrower could really mess up their current or next home mortgage closing:

1.  Maxing out your credit cards

When you are waiting to close on your new home, leave the credit cards at home.  Going out and charging up credit cards is another guaranteed way of messing up your smooth closing.  Consider paying cash until everything is finished with your mortgage closing.

The obvious reason for this road block is that St Louis home mortgage loan approvals are based on debt-to-income ratios.  This means that all lenders look at the consumer’s debt payments and then compares this amount to their income.  If the debt ratio is too high, you may be turned down for a loan you originally qualified for.

Once again, Fannie Mae strongly encourages  lenders to recalculate debt-to-income ratios right before closing.  Keep in mind that it is getting tougher for many to even get a new home loan so why ruin what could be a day of celebration.

So as many St Louis finance experts will tell you, be patient and wait to buy those new appliances or electronics for that new home.

2.  Applying for or getting a new credit card or auto loan

If you really want to ruin your chances of a smooth mortgage closing, simply go out and make one of the biggest and unintelligent mistakes many borrowers make and that is getting a new credit card or auto loan especially without discussing this with your loan officer or banker.

Not only is this a sign of disrespect to the lender trying to make your loan go smoothly, it is the kiss of death as far as financing is concerned.  So, do not even think of doing this!

Here’s what happens:  A consumer gets a new car loan before closing.  The current lender who is working on your loan packet doesn’t know.  You miss a couple of home loan payments because of this new debt.

Fannie Mae will certainly go over past documents and when they discover the undisclosed auto loan, the lender who made the loan will have to buy it back as a bad mortgage and thus lose money.

That will no longer happen.  They will at the last minute do a new credit check and turn you down due to your financial negligence.  This also applies to a new credit card whether or not you use it.

3.  Changing your employment

It doesn’t matter if you hate your employer or can make more money at a new job, don’t do it!  This action will most certainly derail your new home loan before you every get to the closing table.

Also, don’t change how you are paid.  That means don’t go from a salaried position to a commission with huge bonuses.  Do this after you close on your home.

In fact, Bob Walters, chief economist for Quicken Loans puts it succinctly well:  “Because the rules about any job change, especially if you go to commission or bonus, usually you need a two-year history.  So if all of a sudden you switch from W-2 to some other kind of compensation, and you don’t have the history, a lot of times that income can’t be included… maybe now you don’t qualify.”

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 877-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

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