5 Banking Tips for a Smooth Home Loan Approval
Even with the increased regulations governing today’s mortgage financing, your mortgage experience doesn’t have to be a stressful one. In fact, potential borrowers like you can start setting themselves up for a smoother loan approval before filling out a mortgage application.
- Monitor and maintain your bank account(s) frequently to ensure there is always a positive balance.
- Avoid deposits into your bank account(s) not directly related to your monthly salary/income during the loan process.
Lenders are required to track and explain any deposits or withdrawals within your accounts. When the funds are not easily linked to a paycheck, this can result in additional documentation required from the borrower to verify where the money originated.
- Be prepared for closing costs & down payment funds at least 2 months prior to underwriting.
Significant funds going in or out of your bank account(s) will have to be evidence for 2 months prior to the underwriting process and through closing.
- Avoid moving funds between accounts, keeping funds needed for closing in one account.
Lenders are required to track and explain any deposits or movement of funds during the loan process. This can lead to additional documentation requests for you and possibly even a delay in the loan’s approval.
- Avoid cash deposits for closing cost funds. Cash deposits are very difficult to source where the money came from and may not be credited as funds available for closing.
Contributing Author: Evan Jansen
Evan Jansen is a mortgage industry veteran with over 14 years of experience in the Colorado marketplace. Evan has helped more than 800 individuals finance their dream of owning a home. Summit Mortgage is a local branch of a national lender, conveniently located in the Denver area. We are licensed in Colorado, California, Washington, Texas, and Flordia.