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Phil Dumouchel

Do's and Don'ts

Monday, October 1, 2012 - Article by: Phil Dumouchel - TD Bank - Message

"Do's and Don'ts When Applying for or Closing a Mortgage" (developed by PrimeLending).

Here are a few important points and reminders ("do's and don'ts") before you apply for and close on your loan.

? DON'T change jobs without consulting me. A change in compensation could affect your ability to qualify. Borrowers must have a two-year history of overtime, bonuses and/or commissions from the same company to be counted as income. As a quality control check, lenders may verify employment on the day of closing.

? DO keep documentation on any large and significant deposits into your bank accounts, especially CASH. This type of "paper trail" includes copies of all paperwork necessary to prove a financial transaction: copies of all checks, deposit slips, loan paperwork, forms to liquidate assets, etc. In general DON'T deposit cash because it is very difficult to document the source.

? DON'T co-sign for a loan, lease, or credit card, or any type of purchase. The payment will show up on your credit report as an additional debt.

? DON'T repeatedly transfer funds from one account to another. Keep clear records on such transactions and expect those will be needed as part of your loan documentation.

? DON'T open new loans or additional lines of credit or make any large purchases on existing credit cards or other accounts; in general hold off on these until after you purchase the home. As examples, purchasing a car, a new or "roll over" loan from a finance company or buying major appliances for your new home may hurt your debt-to-income ratio and your credit scores.

? DO alert me if your salary or other compensation changes from what is stated on your loan application.

? DO notify us if your address changes from what appears on your original loan application. We will complete rental and mortgage verification for all of your residences during the last two years.

? DO acquire homeowner's insurance with minimum coverage equal to the amount of your total loan or the replacement value of the house (whichever is lower). DO share the agent's name and phone number with your mortgage officer or processor at least ten days prior to closing.

? DON'T negotiate your purchase contract with an allowance (such as for repairs, appliances or new carpet) and expect to get money back at closing. An allowance can be used to pay costs at closing or will be held to be paid directly to a contractor or supplier.

? Do expect to bring a cashier's check (certified funds) to closing made payable to the title company for the amount of your downpayment and share of closing costs. (Or a wire transfer from your bank to the attorney.) If you are uncertain about what to do at any point of the loan process, please contact me for more information.

Note: The views expressed on this site are those of the individual author and do not necessarily represent those of PlainsCapital or its subsidiaries.

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