Buying or refinancing a house is exciting. It can feel complicated too, especially if you are buying your first home or if it has been a while since you’ve gotten a new mortgage. Check out these tips that can help you avoid delays!
1. Don’t make big changes to your finances
Lenders such as Freedom Mortgage typically check your financial information again right before your mortgage closes. Changes to your finances might change your loan eligibility, too, and delay your home purchase or refinance.
2. Avoid employment changes
Because lenders usually require a verifiable employment history and an explanation of any gaps in employment, any change in employment status may impact your loan application. Alert your lender if you think your employer or employment status might change.
3. Steer clear of new loans and credit cards
Taking out a new car loan, opening a new credit card, or getting a new personal loan can change your credit score. Since credit scores help us decide who qualifies for loans as well as the interest rate we charge, it’s best to avoid doing anything that might change your credit score before closing.
4. Check before you pay off debts
Paying off loans or closing accounts can also change your credit score. Try to avoid paying off debts besides your usual monthly bills or closing accounts until after you close on your new loan.
5. Leave your money where it is
Lenders look for people who move money - especially large sums of money - in or out of bank accounts right before closing. We may ask for explanations and documents about large transfers before we finalize your mortgage, which can delay closing on your house or refinance.
6. Acknowledge receipt of your Closing Disclosure
Federal law requires that you receive a copy of the Closing Disclosure at least 3 business days prior to closing. So we need you to acknowledge receipt of the Closing Disclosure in a timely manner. The Closing Disclosure provides information on the actual costs of the loan, including interest rate and loan terms, fees, closing costs, and projected monthly payments.
Read your Closing Disclosure carefully. Compare the final terms to the terms in the Loan Estimate you received when you first applied for the mortgage. Make sure you understand the information you find in the documents. Feel free to ask your loan advisor any questions if you find anything in the Closing Disclosure is unclear.
7. Keep financial documents where you can find them
When you apply for a mortgage, we are likely to ask for copies of your W-2 forms, tax returns, bank statements, and other documents related to your finances. Keep all your paperwork in one place and keep it with you. Sometimes customers don’t realize a document they need for closing is already packed in a moving box or packed away in storage.
8. Confirm your closing date before you schedule
There's lots of scheduling to do when you buy a home. If you are renting a home or apartment, you might have to give the landlord notice. You might be hiring movers or contractors too. Make sure you have a confirmed closing date before you lock down dates for these other things. We’ll work with you to find a closing date, time, and location that is convenient for you.
9. Bring your spouse and maybe a witness too
In some states, spouses will be required to sign documents at closing even when they are not listed on the mortgage or home title. Many states require a witness when closing documents are signed, too. You can bring a family member to act as a witness if you like. When you close on your home in the offices of an attorney or real estate agent, they may have people available to act as witnesses. Your Freedom Mortgage loan professional will make sure you understand the requirements in your state.
10. Bring the necessary identification to closing
Most people need to bring two forms of valid identification to a closing. These documents need to be current. You can’t use an expired form of identification. Generally speaking, you will need a federal or state-issued photo identification document, such as a driver’s license, military ID or passport. For the second form of identification, many times your Social Security card or a credit card that shows your full name is enough. Witnesses need identification, too. We’ll send you a closing package that explains what you need to bring.
11. Bring payment for your closing costs when necessary
If you have costs you need to pay at closing, be sure to bring a valid form of payment in the correct amount. We’ll make sure you know how much you need to pay, and the forms of payment we can accept, before your closing day.
12. Bring a voided check if you are getting cash out
If you are refinancing a home and getting cash out with your new mortgage, bring a cancelled or voided check for the account into which you want the lender to deposit the money. This check will show your account and routing numbers the lender will need to make the deposit.
Do you have questions about a loan you are closing with Freedom Mortgage? Please contact the loan advisor or closing advisor who is helping with your mortgage.