Once you sign the sales contract on a house, the clock starts ticking. There’s a limited window to close the loan and finalize the sale, so here are some things to consider to help the process go smoothly.
Talk To Your Loan Officer About Any Financial or Employment Changes
Even after you sign a sales contract, the smallest financial changes could affect your approval. Before you make any changes including transfers, withdrawals, and/or deposits, talk to your loan officer. The financial changes might be okay, but they may require a paper trail.
As best as you can, stay in your current job. Underwriters like stable employment history and a sudden change can be risky for lenders.
If you’re thinking of leaving your employer for something better and/or different, talk to your loan officer (similarly, if you lose your job, tell your loan officer as soon as possible.). Sometimes it’s best to wait, especially if your loan is closing in the next couple of weeks. If it can’t wait, you may have to delay your closing slightly so you can prove the new income and that you have the qualifications to make it last.
We’ll ask you for a lot of documentation to prove your financial situation, but give us copies and keep your originals for reference and future use.
Use an Approved Account for Withdrawals
Underwriters track where your money comes from for your down payment, earnest money deposit, and closing costs. Before you withdraw funds, make sure they’re coming from an account the underwriter already approved. This is so the underwriter can ensure the money is yours and you aren’t borrowing from a friend, family member, or a new loan.
Get Proper Documentation for Gift Funds
If the money for the down payment or closing costs is a gift, clear it with your loan officer first. Gift funds are often acceptable, but they may need to meet certain requirements, including a paper trail proving the funds are legitimate. Your loan officer can help you understand what you need from the donor, such as a gift letter and proof of where the funds originated as well as what you need to provide to prove receipt and deposit of the funds.
Make Payments on Time
Underwriters pull your credit when you apply for the mortgage and again before you close on it—your score should be around the same both times. If you make any payments late during this time, it can affect your credit score.
Selling a Home Before Closing on the New One? Keep a Paper Trail
If you’re selling a home before closing on your new one, keep a paper trail. You must show the underwriter for your new mortgage that your existing mortgage is paid off. You may also need to prove receipt of funds from the sale if you’ll use them for the down payment on your new home. Talk to your loan officer about any other documentation the underwriter may need to track the sale of your home.
Check Your Credit
Until your loan closes, it’s important to keep an eye on your credit. You can pull a free credit report once a year through the Consumer Financial Protection Bureau or via Credit Karma. If you notice any inactive or fraudulent activity, or that you’ve been a victim of identity theft, report it to the credit bureaus and your loan officer right away. Staying on top of your credit history and score is a great way to make sure you’re on track to close on time.
Our loan officers are approachable, helpful, and give advice. It’s our goal to get you to the closing table as fast and stress-free as possible!