Here's another weekly installment of Do's and Don't's for prospective borrowers embarking on, or already engaged in the home mortgage process. In case it needs to be said, the "Don't's" are strictly for comedy (though most are based on real world examples of things that will kill or greatly delay the mortgage process).
The "do's," on the other hand, are potentially valuable nuggets of information that may greatly benefit your mortgage experience. In fact, most of them can end up making a difference in the success or failure of a loan, and at the very least, can help avoid costly delays.
Above all else, remember that your loan originator wants to close your loan as quickly and as efficiently as you and the good ones fully appreciate that their borrowers' satisfaction plays a huge role in their long term success.
DO: Ask you agent about any covenants or subdivision rules you will be expected to follow at your new home.
DON'T: Inquire whether you can operate a combination pawn shop, tattoo parlor, and intimate café "as long as the neighbors don't find out."
DO: Inquire with your title company on any deed restrictions (such as mineral rights) applicable to your property.
DON'T: Begin strip mining your back yard in hopes of striking gold after watching several mining shows on The Discovery Channel.
DO: Provide all pages of all records requested without blacking anything out.
DON'T: Tell your loan officer you "know for a fact" you can't be asked to provide tax returns because they weren't required when you closed your last loan in 2007.
DO: Discuss your home's features, improvements, and potential value with your lender.
DON'T: Decide your home must be worth $250,000 now solely because you paid $200,000 for it in 2009.
DO: Tell your lender if you have any second mortgages or home equity lines before you start your loan.
DON'T: Take a $20,000 advance on your current home equity line three days before closing.
DO: Feel free to ask your lender how your appraiser will be assigned and what to expect during the appraisal process.
DON'T: Inquire with your loan officer for how recommended amount for "appraiser gratuities".
DO: Tell your lender if your taxes or homeowners' insurance premiums have changed.
DON'T: Advise your lender you want to shop around for homeowners' insurance and will decide on the new company the day before closing.
DO: Discuss available rate and term options with your loan officer before he starts your loan.
DON'T: Decide to switch from a 30 year term to a 15, then to a 20 during the loan process.
DO: Decide if you want cash back and, if so, how much, during the initial application process.
DON'T: Ask your loan officer 24 hours before closing if you can now get $10,000 cash back on a no cash out refinance.
DO: Ask for clarification if the room count or square footage shown on your appraisal appear incorrect.
DON'T: Call the appraiser every 4 hours to ask when the appraisal will be completed.
