Part of the home buying process is securing funding for the home. When you meet with a loan officer, he or she is not only evaluating what you put down on your loan application, but also what you say to him or her. Saying the wrong thing could lead to even more scrutiny of your financial situation and make it more challenging to secure a loan. To help you avoid delays in funding, here are a few things you should avoid saying to your lender.
Your Down Payment Is Borrowed
The lender pays close attention to the down payment and how it has been secured. Even though it might not seem as if how you managed to raise the funds for the down payment is not important, it is. If the down payment is a gift, the lender's scrutiny of it will likely end there.
However, a down payment that was loaned to you by a family member, friend, or other source will undoubted lead to additional questions from the lender. Since the loan has to be repaid, the lender now has to consider how it will impact your ability to pay the mortgage loan on time. In the eyes of the lender, the more debts you have, the more likely it is that you will default on the loan.
Ideally, you should attempt to save the money for the down payment or ask a family member for a gift. If you are receiving a loan to cover the funds, be prepared to prove to the lender that you can still pay the mortgage loan on time each month.
Your Employment Situation May Change Soon
Lenders are typically concerned with your current employment situation at the time of closing. The lender wants to be sure that you have the finances available to pay the monthly notes. If you have a change in your employment situation coming up, the lender could be concerned about your ability to make payments in a timely fashion.
A change in your employment situation, such as switching to a new career, might not seem like a big deal to you, but the lender could be nervous. Unless your employment change is going to occur before close, disclosing it now might not be the best move. If the change does not occur or it has no impact on your ability to make payments, you could have unnecessarily caused panic in the lender.
If you are already working with a real estate agent, talk to him or her about other things you can do to avoid jeopardizing your chances of being approved for a loan.