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Mortgage Nightmares That Can Ruin Your Life

You have probably heard some horror stories about the mortgage refinance or home buying process.It is easy to get stressed out when trying to work through one of these processes.If you are educated and prepared, you can avoid some of the most common mortgage nightmares, and you need not worry.   

Not having enough money in your bank account is one common mortgage nightmare.  It is best to put the down payment money in y our account at least two to three months ahead of time and let it sit there.  You will have to prove to the mortgage holder that you have enough money in your bank account for the down payment, the earnest money and all of the closing costs.  The lender will require documentation to verify that the money is in your account and to prove where the money came from if the deposit to your account was recent.You cannot use cash for a down payment, so make sure the money is in your account.   

Banks feel a lot better about approving you for a refinance or new mortgage if you have had the money in your account for quite a while.  They don’t really feel as safe when you are moving money from one account to another, as it becomes hard to track.  This is a common mortgage mistake and can lead to a lot of problems if it happens.  The bank will require you to produce a paper trail for documentation to show where the money came from etc. and this process can take a long time to get all the paper work together.  If the paperwork for this documentation is not complete, they may not accept it as proof that your money has been there for a long time. This is important for both conventional loans and bad credit mortgage loans.   

For example, when working with a new loan or mortgage refinancing, you will need to tell the loan officer where your down payment will be coming from.  The loan agent will notate this on the application and will verify it by looking at the bank statements you give him.  At closing, this will be verified again, and if the money isn’t there, or you decide to take your down payment money from a different account, you may have to start over on the approval for your mortgage refinance.  This can be even a bigger problem if you have bad credit.  You may have even signed all of the closing papers, but if the money is coming from a different place, the underwriters must start over on the underwriting process.  This could delay your loan funding for a while or may even cause you to lose the loan altogether.   

Never try to withhold any information on your mortgage application.  If you misrepresent any of the information or omit anything, you may be committing a felony in the form of fraud.  You will always want to be totally truthful on your applications and paperwork and give accurate information.  Paying attention to the details can keep you from experiencing the mortgage nightmares you hear about.