The Greenbrier Valley Board of Realtors monthly meeting/luncheon was held Nov. 19 at the Elks Country Club. Guest speaker was Donna Backus, loan officer at Victorian Finance. Backus provided Realtors with reasons why a loan is turned down just days before the scheduled closing when an approval had already been obtained. She stated that borrowers need to be educated as to the things they shouldn’t do when obtaining a loan – things that could result in a last minute denial when credit is re-pulled.
“At Victorian Finance, LLC,” Backus stated, “We provide borrowers with a “Thou Shall Not” list,” which includes:
1. Thou shall not change jobs or become self-employed: Pay stubs for the past 30 days are required, so changing jobs would create a 30-day wait plus clearing any probation period. Self-employment requires two-year’s history, so these could cause delay or denial.
2. Thou shall not buy a car, truck, van, motorcycle, boat, RV or any other type of vehicle: Creating new debt will increase the debt ratios as well as lower the credit score when pulled. If a borrower is close on qualifying, this could disqualify them at the last minute.
3. Thou shall not make a substantial credit card purchase or let payments fall behind: Increasing the debt load on a credit card can lower the credit score as do missed or late payments.
4. Thou shall not spend the money needed for your down payment: An estimate is provided to the borrower at the time of application, funds are verified and must remain in the borrower’s bank account until closing.
5. Thou shall not buy the furniture before you buy your house: Purchasing furniture will increase the debt ratios and lower the credit score.
6. Thou shall not originate any new inquiries on your credit report: Having your credit pulled can decrease your score. Too low of a score can result in loan denial.
7. Thou shall not make any large deposits into your bank account: All deposits have to be sourced: Non-payroll deposits have to be proven to be from an acceptable source. If not, the deposits will be deducted and could cause the borrower not to have enough funds to close.
8. Thou shall not change bank accounts: Bank accounts need a two-month history, and switching accounts can result in delays due to extra paper trails and deposits.
9. Thou shall not co-sign for anyone: Co-signing obligates you to the payment even though another party intends to make it.
10. Thou shall not purchase ANYTHING until after the closing: Purchases during the loan process can lower the credit score and increase the debt ratios, so nothing should be done to change what has already been verified. Credit will be pulled just prior to closing, and changes could result in last-minute loan denial.
When considering actions that could change your financial picture, be sure to call your Loan Officer first. Backus’ email is email@example.com.
For the Alcova Mortgage monthly donation program, the winner was Keith Shaver, Coldwell Banker Stuart and Watts. Each month, a GVBOR member’s name will be drawn. The winner will choose a charity, school event, church or association of their choice and Alcova Mortgage will cut a check for $100 and make donation on behalf of the member. Shaver’s $100 donation went to the Board of REALTORS “Feed the Need” food drive.