4 Ways You Can Put Your Home Loan in Jeopardy

Posted by Team Donovan on Wednesday, May 24th, 2017 at 12:17pm.

So you’ve decided to buy a second home in Orlando. Congratulations! If you plan to finance your holiday home purchase, you should be careful about what you do between the time your loan is approved, and you actually close on the purchase. 

Lenders have been known to rescind a loan offer shortly before the scheduled closing if the buyer makes one of the following missteps: 

1. Making a big purchase – Buying property is a big enough transaction. Don’t spoil the chances of your loan going through by purchasing any other items such as a new car or furniture for that vacation home. A big purchase (especially one you plan to finance!) can change a buyer’s debt-to-income ratio. That ratio is what the lender used to approve the home loan. Save those purchases for after you close on your home. 

2. Missing payments – Once your home loan is approved, make sure you are diligent about paying all of your bills on time. Any late payments can raise a red flag with lenders. If you have a dispute about a bill, pay it anyway, and set a reminder to dispute it after your home loan closes.

3. Cash transfers – Another big red flag for lenders occurs when a buyer transfers large sums of money between accounts, or makes an undocumented deposit. If that money hits your checking account, it could seem to a lender as if you’re getting ready to spend your cash to close. The lender could also assume that any undocumented deposit has come from an ineligible source, and can deny your loan as a result.

4. Opening new credit / charging your current cards – Opening a new credit card and/or increasing the debt load on your current cards can hurt your chances of successfully closing a home loan. Lenders will likely run a lately check on your credit. If they see that you’ve increased your debt to income ratio even the tiniest bit, it could be enough to put your loan in jeopardy.

The majority of loan officers will advise you on what to do and what not to do between the time you receive approval and your loan closes. If you have any questions, ask your lender ahead of time so you’ll be prepared. But it’s also a good idea for you to keep a close eye on your credit.

When you’re looking for a holiday home in Orlando that your family can use, or as an investment property, let Team Donovan lend you a hand. We’re experts in the Central Florida real estate market. We specialize in the area near Disney, since it’s a popular destination for visitors who wish to rent vacation homes during their holiday. 

Call us at 407-705-2616 to schedule a complimentary consultation today. We look forward to working with you!