Every borrower wants their mortgage closing to be simple and stress free. While it may not always feel like it (between sending documents, tracking down last years T4's and searching for bank statements), lenders do want the same thing.
Here are some timely "do's and (mostly hypothetical) don'ts" for borrowers to consider during the loan application process. While no single list can completely cover all loans, following these "do's and don'ts" during your mortgage application process will help you close your loan faster, sleep better at night, avoid premature gray hair, and help your mortgage broker give you the best service possible.
DO: Ask your mortgage broker questions and listen to his/her answers.
DON'T: Solicit mortgage advice from your cousin's hairdresser who had a real estate license in 1995 and almost sold 3 houses.
DO: Promptly provide all documents requested by your mortgage broker to speed up your closing.
DON'T: Leave out pertinent details on your loan application, such as that pesky pending lawsuit, the layoff notice you just got at work, your unpaid child support, or the fact you haven't actually filed a tax return since 2009.
DO: Check your email frequently during the loan process for questions and updates from your mortgage broker and respond to any requests they have.
DON'T: Start a loan the day before you go on a two week camping trip with no cell phone or email access.
DO: Make sure you and your mortgage broker discuss your rate lock, agree on when to lock, and have a plan for closing by lock expiration date.
DON'T: Instruct your mortgage broker to lock the rate, then ask her a week later if she can improve it because you heard a radio ad stating rates dropped and are now "THE LOWEST EVER FOR THE 19TH CONSECUTIVE WEEK!!"
DO: Be comfortable with and confident in your mortgage broker and loan before you submit a formal loan application.
DON'T: Start the loan, then "check around" with 6 other lenders "just to see what they have" the week before your closing.
DO: Make sure your employment, asset, and personal information are correct on your loan application.
DON'T: Become gravely concerned because the credit card balances on your credit report aren't identical to the current balances.
DO: Ask for a written loan estimate before you start the loan, and discuss it thoroughly with your mortgage broker .
DON'T: Rely on vague statements such as "I'll get you a great rate", "don't worry about the new loan size", or "this is an awesome deal."
DO: Feel free to ask questions to your mortgage broker during the loan process.
DON'T: Leave 3 voice mails on her cell phone on Canada Day, then wonder why she didn't get right back to you.
DO: Check ficom.org to see if your mortgage broker is a member.
DON'T: Rely on pop-up internet ads promising rates 2% lower than you've ever heard of for reliable mortgage information!
DO: Fully inform your mortgage broker of any business losses or other tax situations that impact your income.
DON'T: Ask your mortgage broker if she would like to invest in your Ponzi scheme, er, "investment club" and earn 10% guaranteed return monthly.
DO: Get a survey done to be sure of the exact boundaries of the yard on your new home.
DON'T: Move the surveyor's stakes 2 feet into your neighbors' lots to maximize the space available for your new pool.
DO: Show the appraiser invoices for any major upgrades you've performed on your home.
DON'T: Expect a significant pricing adjustment on your appraisal for adding three bushes and a new mailbox.
DO: Tell your mortgage broker if you are buying a home from a relative.
DON'T: "Forget" to mention the three rental homes you own free and clear.
DO: Inform your mortgage broker if the home you're buying is for your vacation use only.
DON'T: Tell him the duplex you're buying nine blocks from your current residence is for vacation use only.
DO: Use your existing credit judiciously during the loan process unless instructed otherwise.
DON'T: Open 3 new charge accounts during the loan process to save 10% on curtains, bath towels, and throw rugs for your new home.
DO: Ask your neighbors, family, and coworkers for referrals to mortgage brokers they had great experiences with.
DON'T: Use your boss's nephew for your loan because "he's just starting out and needs the business."
DO: Understand that loan terms vary by credit score, equity, loan purpose, property type, loan size, tax/insurance escrows, property location, and lock period.
DON'T: Expect to get the same rate your friend with an 820 credit score got two months ago when your score is 609 and rates went up 1% in the interim.
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