The purchase of a home typically requires the largest monetary loan that most people will request in their lifetime. According to the National Association of Realtors, the median selling price of homes throughout North America was $252,800 as of May 2017, the highest on record.
Colorado ranked number two in the nation for annual price appreciation of homes with a 10.7 percent increase, according to the Federal Housing Finance Agency quarterly report in May 2017. Not only are prices increasing, but the supply of homes does not match the demand of buyers and as a result, bidding wars over homes are common now, creating a very challenging market for people desiring to purchase a new home in Colorado Springs and Denver and surrounding areas.
For these reasons and more, when you find your dream home and are fortunate enough to have your offer accepted by the seller of the home, you need to do everything in your power to ensure that your request for a home loan is accepted.
Once your mortgage loan application is completed, the A Plus Financial team immediately goes to work for you to gain approval for your loan. Here is how you can help us to help you during the processing of your loan which could take between 7 and 60 days depending on individual contracts:
- Do Not make any large cash deposits into your bank account while your home loan is being processed without first speaking with your mortgage loan originator (MLO). For example, if you decide to sell a vehicle, your MLO will recommend that you wait until after the closure of your mortgage loan. If waiting is not an option, your MLO will advise you to carefully document the sale of your vehicle, by obtaining a clear copy of the current vehicle registration showing you as the owner and a dated Bill of Sale, including the sale price of the vehicle so it matches the exact cash deposit into your bank account. The lender will require this documentation and may not grant you the loan without it.
- Do Not make large purchases while your home loan is being processed. This includes furniture and appliances you may feel you need for the new home. Ensure that your mortgage loan is approved and you have the key in hand before making any large cash or credit purchases that will affect your credit score. At best large purchases will slow the process of your loan and delay closing and at worst, your loan request will be denied by the lender.
- Do Not pay off debt while your mortgage loan is being processed, with one exception – any outstanding judgments against you. Contrary to popular opinion, paying off debt suddenly will not necessarily improve your credit score and can cause your score to be lowered. Credit scoring companies have carefully guarded and complex strategies for the compilation of their scores so play it safe and talk with your MLO before paying off any debt during the processing of your home loan.
Call your MLO if you have any questions about purchases or bank deposits that may affect your credit portrait during the processing of your home loan. We are on your team and want to help you avoid unnecessary stress in your home buying process whenever possible.
National Association of Realtors: Existing Home Sales; https://www.nar.realtor/topics/existing-home-sales
Federal Housing Finance Agency: U.S. House Prices Rise 1.4 Percent in First Quarter; https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=US-House-Prices-Rise-1-4-Percent-in-First-Quarter.aspx
Fox Business: U.S. Existing Home Sales up in May despite Tight Supply; http://www.foxbusiness.com/features/2017/06/21/u-s-existing-home-sales-up-in-may-despite-tight-supply.html