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What you need to know to get your mortgage loan approved and closed

Posted at 11:19 AM, Oct 02, 2014
and last updated 2014-10-02 14:19:30-04

New American Funding is a paid advertiser of Sonoran Living Live

Qualifying and getting Final Approval for a mortgage loan has become much more complicated than it has been in the past.  The Final Approval to Fund the loan is subject to documentation, verification and scrutiny up until the day the funding wire is sent to the title company.  Understanding the best practices and what you as a borrower should and should not do begins before you ever start looking at homes with your realtor.  If you follow the best practices, you will have less documentation and increased success in closing escrow on time for your new home purchase or refinance.

Underwriters view a two month window for assets and documenting the sources of funds for the closing.  Making large deposits into your bank accounts will require documentation of the source of the funds.  Large deposits made from "cash on hand" will not be allowed as a source of funds and should be avoided.  Gift funds from family members will require a gift letter as well as documentation of the source of funds from the family member - otherwise the funds will be disallowed.

Changing jobs could delay or jeopardize the ability to obtain a mortgage loan.  Actually changing careers may result in a loan denial, whereas a new job in the same industry will most likely delay the close of escrow.  When changing jobs, it is required to receive your first paycheck with the new company prior to the close of escrow.  Changing positions which have a different pay structure could also prevent Final Approval on a mortgage loan.  If you have a two year history of receiving a salary as a W2 employee and then become a commissioned or bonused employee, this income cannot be used to qualify for the loan because you do not have a two year history with this type of pay structure.

Getting married or divorced can also prevent or delay obtaining a mortgage loan.  Government loans such as Veteran's loans and FHA loans require that the spouse's liabilities on their credit report be factored against the income used to qualify for the loan.  So, even if the spouse is not a borrower on the actual loan, the income of the borrowing spouse will have to be sufficient to cover all liabilities for both parties.  In the situation where a borrower is getting divorced, there needs to be a legal separation or finalized divorce to document the allocation of debts and/or alimony/child support.  The absence of the legal document creates a situation where it is unclear of the borrower's ability to borrow and repay the mortgage loan and could result in the denial of the loan.

Finally, activity which reports on a borrower's credit report should be minimized if not halted during the mortgage application and processing of the mortgage loan until after the loan is funded and escrow is closed.  This would include the continuation of on-time payments for anything reported to the credit bureaus, applying or new credit or increasing balances on any credit cards.  These changes are checked and reviewed up to the close of escrow and all purchases should be delayed until after the mortgage loan has funded and closed.  Student loans which are deferred are counted against a borrower's debt unless the student loan servicing company will provide documentation verifying that the student loan is deferred for at least 12 months past the close of escrow.

The ability to qualify and successfully close on a mortgage loan can be determined through consultation and work with a licensed mortgage originator such as Lisa Amato, NMLS #249826.  New American Funding, NMLS #6606, is a Fannie Mae and Freddie Mac Direct Seller/Servicer, FHA Direct Endorsement - HUD Approved, and VA Automatic mortgage lender.  The company is licensed in 33 states including Arizona, Licensed by the Arizona Department of Financial Institutions - License #BK-0912376 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780.  Arizona has branches in Scottsdale, Mesa, Fountain Hills and the West Valley.  

Lisa Amato, NMLS #249826, is a Senior Mortgage Consultant with 21 years of experience in finance and mortgage lending. Amato will provide options for your next home purchase or refinance, serving as your resource for information and guidance through the loan process, ensuring that all of your questions are answered while helping you achieve your goals.


New American Funding  
(480) 244-6490


New American Funding is a paid advertiser of Sonoran Living Live