The 5 Biggest Mistakes made during a home loan process

Tweeting birds, dancing squirrels, brightly colored floating hearts swirling through my mind; as a voice that mimics Mini Ripperton, says...."we are clear to close". I hang up the phone with a heavy sigh of relief, and gratitude. I quickly begin a celebratory series of text and emails to all parties involved; reiterating the lovely words I just heard. "We are clear to close"...I type. Now, on with my day, and my latte. Yet, no sooner did I hit the last send button; my cell rings, again...this time with a far more serious tone. "Caitlin". I reply...yes. "They bought a car, today. They just signed the loan docs". Silence. I can hear us both holding our breathe, as if it was our last; waiting to determine how the other will respond. 20 seconds, or so pass...and, without warning, and with all the force in me, I project just 3 precise words to convey my thoughts at this moment..."OH HELL NO!"

Suddenly my "Loving You" melody has turned to AC/DC's "Highway to Hell". No more, chirping chicks, or twirling animals...just a dark canvas in front of me, with the 3 new words...DEAL IS DENIED.

A Massive Waste of Time 

I would venture to guess that more Realtors have heard these words, than clients; as we deal in quantities. Regardless, of who or how often they have been uttered; it is heart-wrenching. For the real estate professional, it means anywhere from 4 - 8 weeks of work, having been wasted (sometimes more, if you've had a client with special needs or is a bit particular). And, as much as I know we are NEVER to mention money in this business (as it makes us seem like mongers)...we just lost our pay check. Let's be crude, here...do you know of anyone that would be cool with going a month + without income, anticipating it; and, then snap...gone. Me, neither.

Now, let's flip the coin...client; buyer or seller, this is not good. The majority of real estate sales involve people moving from one location to another; and more often than not, those funds to do so, have to come from the sale of a home. So essentially, you outta luck, padn'r.

So, having dumped salt on the "what if" wounds of what could happen if your home loan is NOT cleared to close; let me soothe that burn, with a list of medicinal suggestions to prevent it.

5 Simple Tips 

#1. Do not put anything on credit, while in contract. I don't care if the Encyclopedia Britannica dude shows up at your door, with a book that is guaranteed to parallel you with Einstein. "Only $29.99, on approved credit". Send him packing. If the extra cash isn't in your stash...then it's a...no!

#2. Do not spend any of the money you have saved for closing (per the suggestion of you lender). I have seen this mistake. "Well, we have 30 days to replace it. I have that bonus coming in. I was promised overtime this week." A month comes and goes quickly, sales quotas don't always get met, and overtime should never be in the same sentence as, promise. Leave the stacks be.

#3. Don't get married. Now, the title issues are all messed up. Don't get divorced, either. Just chill for 30ish days. Your honey will still be around; and, unfortunately so will your ex...lol.

4#. Don't take a new job...and, for god's sake; don't quit one! I get that it's an opportunity of a lifetime; but, any respectable company wanting to hire or promote someone equally respectable (insert your name) will understand you are in the middle of buying home. Change the date on your offer letter to match your CEO (close of escrow). And, if you quit your job...um, how did you think you were going to pay for your new house? Right.

#5. And, finally...don't transfer big chunks of money from one account to another. I know, how could this make any difference; it's still your money, in your accounts. Here's a little insider tip on securing a home loan...it's all about "the trail". The paper trail that is. When you buy a home, you will be asked to provide more paperwork than you ever have in your lifetime, or that to come. So, if you know a potential home purchase is on the horizon; save every paycheck stub, direct deposit receipt, pay off letter, wire transfer record...heck, even keep you receipts from your last Starbucks purchases (I'm sure they will want it to verify cost of living expenses; I normally write if off every year, as therapy).

Break your heart...Break the bank

These mistakes could be costly; not, just financially, but emotionally. Imagine the scene...boxes neatly taped, labeled and stacked to load on a truck, going to your new home. All the dishware is secured in bubble wrap, which means dinner at fast food joints for the next few days; but, you don't mind. You are about to move into YOUR own home. No more rentals, no more living with friends or family. And, you love this place...it is not just a house; but, a home. The circular driveway, french doors off the kitchen, and stone fireplace welcomes you into the family room. Sigh.

But, you can't return a car...no changing your mind. You can't instantly remove a credit inquiry, that has brought your score down to a non-qualifying state. These things, along with a variety of other derogatory marks cannot be easily removed; which changes your DTI (debt to income ratio). That's it...no new home.

Therefore, by taking heed, and following these few simple rules...that hope for a cozy new homestead can happen! First come the keys; then comes the Klaussner. When it comes to home ownership; there are no sweeter words than "clear to close".