If you are in the process of shopping for a home in New York, your purchase may hinge on your ability to obtain a mortgage. While virtually anything can cause a loan to go south, several pitfalls occur more frequently than others in the underwriting process which can be detrimental to your ability to get approval for a loan.
Common Underwriting Problems that can Compromise Your Mortgage in New York
- You don't use accurate income numbers: when it comes to applying for a mortgage, it's important to keep one thing in mind: by the end of the process, your lender will probably know more about your finances than you do. There's no point in trying to inflate your income to qualify for a mortgage; your lender's underwriter will go through your finances with a fine-tooth comb, matching up tax returns with bank statements and pay stubs to ensure that your actual income is what you reflected it to be.
- You don't disclose your assets: similar to your income, it's critical to be honest about your assets when applying for a mortgage. Just because you think your income alone is sufficient to be approved for a mortgage doesn't mean that you shouldn't disclose that IRA or separate bank account; your underwriter will need to know all of the assets you own, even if you don't think they are relevant to your mortgage.
- Your employment history shows gaps: if your employment history is filled with gaps and drastic changes in types of employment, your lender will likely require an explanation of your employment changes. Whatever you do, don't change jobs during the application process unless you absolutely have to--the key to a successful mortgage is consistent employment.
- Your mortgage underwriter can't determine where finances came from: if your underwriter sees an unusual deposit into your bank account, you're going to have to explain where it came from. Furthermore, if that $10,000 you recently deposited was a gift from your grandparents for a down-payment on a house, they are going to have to vouch for you that the funds are a gift, not a loan that is expected to be paid back.
- You obtain new debt during the application process: it doesn't matter how long you have wanted one, or how much you think you can afford it--if you are in the process of purchasing a home that requires a mortgage, now is not the time to go buy that new Porsche. If you waited this long, you can wait until after the paperwork is signed; in fact, after you sign a bundle of paperwork at your closing, you can drive to the dealership and drive your new car to your new home.
- Your appraisal is too low: we get it--you love your new home. You feel that your new home is worth the $300,000 that you contracted for. The fact of the matter is, though, that if your appraisal comes back at $260,000, your lender's willingness to give you a mortgage is only going to go as far as that appraisal. If the $40,000 difference is worth it to you, you're going to have to come up with that money on your own.
Ready to Close? Contact Your New York Real Estate Lawyer.
If you have been approved for a mortgage to purchase your home, Melvin Monachan Attorney at Law is ready to provide you with experienced representation before, during, and after your real estate closing. Melvin has built a firm which is centered around real estate law in New York and has performed countless real estate closings during the decades which he has been practicing law. To get more information about the closing process, or to schedule your real estate closing with an experienced real estate attorney, fill out an online contact form or call (347) 620-0565 today.