CLS Financial | Do’s & Do Nots
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Do’s & Do Nots

When you are starting the loan process, there are key Do’s and Don’ts to follow in order to keep the transaction running smoothly.

Tips For Success:
Things To Do And Not Do During The Loan Process

As you read through them, you will see that they are fairly common sense point, but they go a long way in keeping your loan completing successfully and on time.

  • DON’T ALLOW ANYONE TO RUN YOUR CREDIT OR APPLY FOR NEW CREDIT OF ANY KIND: This includes interest rate shopping or the “Get Qualified” invitations; by giving your social security number may result in a credit inquiry. Every time your credit is pulled by a potential creditor or lender, it could negatively affect your score from 2-50 points for one hard inquiry.
  • DON’T PUT YOUR PERSONAL INFORMATION INTO RATE SHOPPING SITES: i.e. Lending Tree, Lowermybills.com, and etc. Although advertised that only a few lenders will run your credit; that does not stop them from selling your personal information immediately to hundreds of other lenders. This could result in dramatic decrease in credit score and much confusion from aggressive and misleading sales attempts.
  • DON’T PAY OFF COLLECTIONS OR CHARGE OFFS: Paying collections or charge offs may decrease your credit score due to the date of last activity becoming recent. Please contact your loan officer on how to address this before taking any action.
  • DON’T CLOSE CREDIT CARD ACCOUNTS: You will lose the total amount of available credit and length of credit history on that account. This may impact your credit scores. If you must close an account, do it after closing.
  • DON’T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS: This is the fastest way to bring your score down 50-100 points. Try to keep your credit card balances below 30% of their available limit during the loan process.
  • DON’T MAKE ANY LARGE PURCHASES, LIKE A VEHICLE OR FURNITURE.
  • DON’T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS: It will appear you are maxed out on those cards, and penalize you as mentioned above. If you want to save money on credit card interest rates, wait until after closing.
  • DON’T DO ANYTHING THAT WILL CAUSE A RED FLAG: Include adding new credit accounts, co-signing on a loan, changing your name/address with the bureaus, or filing for divorce/separation. The less activity on your reports, the better.
  • DON’T CHANGE EMPLOYMENT: Your loan has been qualified based on your current employment. Quitting, changing jobs or becoming self-employed could negatively impact your approved status.
  • DON’T SCHEDULE ANY VACATION OR EXTENDED ABSENCES: Limited access will affect your availability to sign required loan documents, meet underwriting conditions in turn delaying the loan process and close of escrow.
  • DON’T MAKE ANY LARGE DEPOSITS OR WITHDRAWALS: All deposits over $250 will need to be sourced (requiring a paper trail), seasoned, and explained. The goal is to spend as little as possible as underwriters love to see seasoned reserves. Don’t spend money that you have set assigned for down payment or closing costs.
  • DON’T MAKE YOUR EARNEST MONEY DEPOSIT FROM ANY ACCOUNT THAT HAS NOT BEEN CLS VERIFIED: Only use a personal check, wire or certified check directly to escrow from a CLS verified and documented asset account.
  • DON’T PANIC! The loan process can seem overwhelming, particularly if it is your first time. We will be there for you before, during and after the mortgage transaction.
  • DO CONTINUE TO MAKE PAYMENTS ON TIME ON EXISTING ACCOUNTS: Late payments on any account will negatively impact your loan approval. One 30-day late will adversely affect your credit score and rating.

CONTACT CLS

562-594-6884