Self-Employed and Can’t Qualify for a Mortgage?

Self-Employed and Can’t Qualify for a Mortgage?

The mortgage crisis has had a disproportionately negative impact on self-employed borrowers. In retrospect, it’s easy to see how this happened. And it’s important to understand who’s to blame, how the blame has shifted, and what can be done to adapt to the new lending standards in today’s market.

What Happened?

Some of the first program casualties of the mortgage meltdown were the stated income, stated asset (SISA), and no income, no asset loan (NINA) programs. These programs were initially created to assist self-employed borrowers with great credit and good equity.

Since the majority of self-employed borrowers legally write-off a good portion of their income, they are not allowed to use all of it to qualify. Instead, underwriters use their adjusted gross income (AGI) to qualify.

The SISA and NINA programs allowed self-employed borrowers to state their actual income without having to prove it with tax returns.

Soon, in keeping with the now infamous greedy big bank mentality, these program guidelines were expanded to include W-2 wage earners, sub-par credit worthy borrowers, borrowers with little equity, and un-proven first-time home buyers.

Borrowers were qualifying for loan amounts that they could never afford. Needless to say, the more the qualifying criteria loosened, the worse these loans performed. Soon, defaults began to pile up and the rest, as they say, is history.

Who’s to Blame?

The federal government’s (Fannie, Freddie) misguided policies and the greed of Wall Street and big banks were initially to blame for allowing such lax underwriting guidelines. Opening up the SISA and NINA programs to less qualified borrowers eventually spoiled things for credit-worthy self-employed borrowers.

Smaller lenders and mortgage brokers also contributed by writing loans that they knew were unaffordable. Without question there were some shady individuals and companies that took advantage of these programs. They were negligent in their duties to both limit the amount of income borrowers were stating, and to warn borrowers of the consequences of buying homes they could not afford.

However, the majority of small lenders and brokers were simply following the guidelines that were encouraged by the federal government and written by the big banks. While this is not wholly excusable, it does offer perspective on the rampant “blame-the-broker” theme that the politicians, banks, and the press ran with in the months following the meltdown.

Borrowers who knew they couldn’t afford these homes cannot escape their share of the blame either. Exaggerating or lying about income to buy a new home is at best irresponsible, and at worse criminal.

Still, this doesn’t explain why credit-worthy self-employed borrowers are still being left out in the cold. After all, the majority of SISA and NINA programs performed well when they were limited to the original qualifying criteria.

We still hear the complaints from self-employed applicants today:

  • I’ve always paid my bills on time
  • I’ve got perfect credit
  • I’m being punished for being self-employed
  • It’s not fair

All of these complaints were probably valid three or four years ago when borrowers were caught off guard and struggling to understand the new lending reality that was blanketing the country.

But today’s hard truth is that these borrowers now share in the blame by failing to adapt to the new lending standards. If a borrower needs to show a specific amount of income to qualify for a home, they have to pay taxes on that amount.

CPA’s aren’t doing their self-employed clients any favors by soley focusing on how much they can write off or how they can get away with paying the least amount of taxes.

CPA’s should be focusing on their client’s over-all finances. They have a fiduciary duty to inform them about how their taxes will affect their borrowing ability. Too often they fail to do so.

Moving On

Meridian Home Mortgage understands that there is a real need for stated income programs in today’s market. After all, tax write-offs are legal. And these programs actually worked before the guidelines were expanded.

While stated-income programs might begin to pop up at some point to fill the void, they will undoubtedly be very restrictive. Therefore, the only real full-proof solution lies with the borrowers themselves.

Ultimately, it’s the borrower’s responsibility to initiate a dialogue with their CPA. Discussing write-offs and future mortgage related plans has never been more important. Writing everything off or showing a loss just won’t work anymore – even if those write-offs are legitimate.

Adjusting tax deductions to improve their AGI is really all that’s needed. In other words, borrower’s have to stop writing-off so much and pay more taxes on the income they earn.

Why Tax Returns Matter in Mortgage

Why Tax Returns Matter in Mortgage

Have you ever applied for a mortgage and wondered why your lender asked for your tax returns for the previous two years?

Debt-To-Income Ratio

One of the main qualifying factors used to approve a mortgage is your debt-to-income ratio (DTI). This number is calculated by dividing all of your debt by your income.

Your DTI helps the lender determine if you can afford the new loan, per their guidelines. And it gives the lender an idea of how much money you have left over after your minimum bills have been paid.

Lenders first determine your monthly debt by pulling your credit report and adding the payments on all open debt. Then, they determine your income. If you are a salaried or hourly employee, your income is calculated using the last 30 days of pay stubs and your last two W-2 statements.

So Why Tax Returns?

Lenders also ask for your tax returns (1040) because unlike paystubs and W-2s, tax returns help to explain the entire story about your income.

The lender needs to know if you are writing anything off. Tax write-offs may pose a problem with your mortgage application. The general rule is that if you are not paying taxes on it, the lender is not going to allow you to use it as income.

Losses, Unreimbursed Expenses, and Depreciation

The most common tax write-offs are unreimbursed business expenses, Schedule C losses, and Schedule E losses.

Unreimbursed business expenses are shown on Line 21 of the Schedule A, and can include mileage, uniforms, dry cleaning, cell phone bills, industry publications/journals, job trainings, etc.

If you have a self-employment business you might file a Schedule C or a Schedule E depending on how you structure the business. A Schedule E may also be filed if you own rental property or receive royalties. Both Schedule C and Schedule E may show losses.

Anything listed on line 21 of the Schedule A and any losses from Schedules C or E may be netted out of your income.

On your Schedule C, however, any depreciation that you claim may be added back into your income. The same applies if you file S-Corp returns for your Schedule E self-employment business. Any depreciation filed on those returns may also be added back in to your income.

More to the Story

The story of your tax returns does not end there, however. Your tax returns will also tell the lender if your home has any farm income, if you pay alimony, or if you have received unemployment income.

If you file a Schedule F (farm income) on the property you are refinancing, it may make you ineligible for certain mortgage programs.

If your tax returns list alimony paid to an ex-spouse, that alimony payment may need to be listed as a liability when calculating your debt to income ratio. This can affect your approval.

Your returns will also show if you have received any unemployment compensation, which might require a letter of explanation about your employment history. This can also affect your approval.

Your tax returns play an integral role in the qualification process of your mortgage. If you have any questions or concerns about whether or not you will qualify, a Meridian Home Mortgage Loan Officer is available to answer your questions. Please do not hesitate to contact us.

5 Ways to Simplify the Mortgage Application Process

5 Ways to Simplify the Mortgage Application Process

If you are in the process of a mortgage application and are looking to close as soon as you can, there are steps you can take to help ensure there are no delays.

Here are five tips that can help you:

1. Continue to pay all of your bills on time

Your credit history is one of the most vital elements of your mortgage application. Sometimes it’s necessary for lenders to re-pull credit before the loan process is complete.

For example, if you are applying for a conventional loan your credit will likely be pulled again before your loan funds so that the lender can verify that you have kept your credit clean throughout the course of your application.

A drop in your credit score could increase your rate, or even make you ineligible for a loan.

2. Try to avoid opening any new liabilities after you begin your application

New credit cards, auto loans or other lines of credit will need to be disclosed to your lender just like old accounts. Any new liabilities will need to be verified and added into your debt-to-income (DTI) ratio, which could affect your qualification.

3. Call the appraiser back and make an appointment ASAP

The appraisal process can take up to a week or more to complete. An appraiser has to make an appointment to see your home, perform research on your home from the appraiser’s office, and then prepare the appraisal report.

Try to call your appraiser back and make an appointment for the appraisal as soon as you can to help collapse this time frame.

4. Submit whatever the lender asks for in a timely fashion

If the underwriter asks for documentation, it is pretty certain your loan will not close until they sign off on it. The faster you are able to submit that documentation, the quicker the mortgage process will be.

5. If you switch jobs, inform your lender ASAP

Your lender will verify your employment before funds are issued on your loan. If you switch jobs, the underwriter will need to see at least one pay stub and verify that your new employment will continue.

Be sure to tell your mortgage representative before accepting a new offer so they can let you know how it might affect the process.

As your mortgage broker, Meridian Home Mortgage is committed to keeping the mortgage process smooth and simple. We encourage you to follow these tips to help ensure that your loan closes on time. We are here to help you every step of the way.

Tips for Creating Legible Loan Documents that Sail Through Underwriting

Tips for Creating Legible Loan Documents that Sail Through Underwriting

One thing that drives borrowers crazy is what’s known in the industry as “conditioning”. “Conditioning” is when the underwriter needs additional information before they’re able to approve your loan. Or, they need you to resend documents you’ve already sent.

Typically, the “please resend” requests are due to illegible, crookedly scanned documents, those with pages missing, or something that seems really minor – a folded corner.

For example, take the typical W2 form. Often, they’re printed on thin paper with a light-colored font. Due to being tucked away in a file somewhere, the corner gets folded over.

You scan it in, folded corner and all, and send it to your lender – and get a call back. The underwriter wants to know what you’re hiding beneath that folded corner, plus the document is illegible – meaning, the underwriter can’t read the light font.

The result is, you have to re-scan the document – and probably spend some time fiddling with settings to ensure the printing is dark enough. Sometimes, you have to do this two or three times. Maddening, I know.

What follows are some general tips for ensuring your scanned or faxed documents sail through underwriting.

1. Prepare documents for scanning or photocopying

  • Ensure corners are flat and that the paper isn’t wrinkled.
  • Sign and dated as needed (especially tax forms that were electronically filed).
  • Remove anything that doesn’t belong (i.e. sticky notes or those little “sign here” arrow stickers).

2. Be sure to include all pages of a file

Whether you’re sending a bank statement, a divorce decree or your 1040, be sure to include all its pages – even those you think aren’t important. If you don’t, you’ll hold up underwriting until they have complete information.

3. Create legible copies

  • Whether you scan or photocopy, make sure the resulting copies have legible fonts. This means that when printed out, the fonts are dark enough to be read – especially when faxed.
  • If the fonts are still too light, adjust your scanner or photocopy settings as needed.
  • When scanning your drivers license, be sure all information can be seen on a black and white printed copy: Name, address, license number, photo, etc.

4. When scanning, save docs as jpeg files

  • Sometimes scanning software will automatically save the file as a PNG file, which some lenders can’t use. Or, the PNG file is too big and you can’t send it. Ditto for PDF files.
  • Once you’ve saved the doc as a jpg file, you can use your computer software to reduce its width and height. For example, an 8 ½” x 11″ scanned document can result in a 2 or 3 megabyte file, which may be too large to send.

5. If possible, send files through Gmail

For some reason, some lenders can’t open files sent through Apple’s native email client, or the files get embedded in the email. To alleviate this problem, create a Gmail account and send files as attachments.

Why is all of this necessary?

Due to mortgage fraud and other whatnot in the past, underwriters and lenders are much more cautious and want to be sure you’re not hiding anything.

By creating legible, clean documents that underwriters can easily open and print out, you help ensure your loan application gets through underwriting without holdups – and you make everyone’s job easier, including yours. (Be sure to follow our other tips in the post, “Help Get Your Loan Approved Faster.”)

Considering a home loan or refi? Give us a call toll-free at 877-878-0100. Our friendly advisers are here to answer your questions.

How Separation and Divorce Impact Your Loan Application

How Separation and Divorce Impact Your Loan Application

Mortgage applicants are often surprised to learn how much additional paperwork is required if they’re getting divorced or they receive or pay alimony or child support.

And, they’re surprised to learn that a divorce that may have happened a few years previous may still have bearing on the loan process.

In this post, you’ll learn what to expect – and what paperwork to provide – if you’re currently separate or divorced and applying for a loan.

Alimony and Child Support

If you receive alimony or child support or both, you are required to submit every page of the separation agreement and/or the divorce decree with your loan application.

You must also be current on all child support and alimony payments. If you are behind, be sure to bring it to the attention of your lender. The fact that you are behind usually shows up on your credit report; however, it’s always good to be upfront.

Before closing on your loan, you will be required to bring your obligations up-to-date, depending on the exact loan program, scenario, etc.

In addition, as the borrower, you must disclose if you’re receiving payments or obligated to pay them.

Important: All payments have to be disclosed regardless of the number of payments left (i.e. you have only three payments left to pay or receive).

The underwriter determines if child support and alimony monies can be counted. Typically, underwriting likes to see at least three years continuance.

If you’re the payer (meaning, you’re obligated to pay), underwriting will determine if child support and alimony needs to be counted against your debt ratio.

Joint consumer debt

Whether or not you’re in a Community Property or Spousal state (see below), joint accounts will be counted against your debt ratio UNLESS you can prove your ex-spouse has made the last 12 payments, on their own, from an account that has their name only (not a joint account). Copies of 12 cancelled checks will be required.

Joint accounts include:

  • Mortgage
  • Installment loans
  • Vehicle loans
  • Credit cards

Your divorce decree may specify which debts you and your ex-spouse are obligated to pay. Regardless of what the divorce decree states, these payments may still be counted against the debt ratio if they appear on your credit report.

Commercial Property vs. Spousal States

In Community Property states, your spouse’s debts will have to be accounted for IF you’re separated but not divorced AND regardless of whether the spouse won’t be listed on the new loan or title.

In Spousal states, an ex-spouse will have to sign some closing paperwork – even if he/she isn’t on the new loan. The ex-spouse does not have to sign paperwork if he/she was not on the original title or the ex-spouse is being removed from the title during the new loan process.

See the listing below of Community Property and Spousal states.

If you have additional questions about how your separation or divorce affect your loan application – call Meridian Home Mortgage. Our friendly advisers are here to answer your questions. Call toll-free: 877-878-0100.

Community Property States

  • Alaska
  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington

Spousal States

  • Alabama
  • Arkansas
  • Colorado
  • Florida
  • Illinois
  • Iowa
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Hampshire
  • New Jersey
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • South Dakota
  • Tennessee
  • Utah
  • Vermont
  • West Virginia
  • Wisconsin
  • Wyoming

A Word about VA Funding Fees

A Word about VA Funding Fees

Once you’ve been qualified for the VA Cash-Out Refinance Loan, the lender adds a funding fee to the qualified base loan amount; this fee is then sent to the VA once the loan funds . The funding fee is insurance of sorts that helps protect the government against VA mortgage defaults.

This “insurance” is why the VA allows borrowers to borrow more against their home with lower scores and higher debt ratios compared to other mortgage loan programs.

The amount of the funding fee varies depending on if you’re a first time VA Cash-Out borrower and your branch of military – as you can see in the chart:

If your base loan amount is $200,000 and the funding fee is 3.3%, your final loan amount is $206,600.

In addition, if you’re doing an interest rate reduction refinance loan (IRRRL) – meaning, you’re refinancing an existing VA loan without cashing out – the funding fee is greatly reduced to .5%.

If your base loan amount is $200,00, a .5% funding fee means your final loan amount is $201,000 — an amazing deal!

You may be exempt from the funding fee

The good news is that some veterans may be exempt from paying the funding fee:

  • Disabled veterans – You must be at least 10% disabled with the Department of Veterans Affairs
  • Surviving Spouse – You must be the surviving spouse of a deceased service person or one listed as Missing in Action (MIA) or a prisoner of war. Death must have been service related and the spouse cannot have remarried.

Even if you’re not exempt, paying the funding fee is a small trade-off to being able to borrow and cash out more than non-veterans – along with enjoying lower closing costs and interest rates (compared to FHA, USDA and non-government issued insured loan options).

While VA loans already have reduced closing costs compared to non-VA loans(the Department of Veterans Affairs has strict guidelines pertaining to this),the low or greatly reduced funding fee makes the VA Cash-Out Refinance Program a definite win for veterans.

We’ll pay your appraisal fee

And, to make this an even sweeter deal, if you close your VA loan with Meridian, we’ll pay your home appraisal fee up front. It’s our way of thanking you for your service to our country.

If you’re ready to get started on your VA Cash-Out Refinance Loan, call Meridian today at 877-878-0100. We can help you with all aspects of your loan – from determining eligibility to completing the COE for you.

Or, just fill out our form — and we’ll call you!

The 5-Point Plan When Shopping for a Mortgage

The 5-Point Plan When Shopping for a Mortgage

If you’re shopping for a mortgage, you may have noticed that you started getting a lot of calls and mail from mortgage companies.

You may be wondering how they knew you were in the market for a mortgage – especially if you’ve talked to only one lender. Here’s a little secret that many consumers don’t know:

When a mortgage company pulls your credit, this sets off what’s called a trigger at the credit bureau. Based on this trigger, THE CREDIT BUREAU (not the mortgage company) sells your information to trigger companies who then “unleash the hounds” in an attempt to steal your business away from the mortgage company you first spoke with.

We’ve written other blog posts about this practice, so I will not go into detail here. But, be sure to read, Triggers: A Legal Business, and Abusing Trigger Leads, for factual information about this practice.

Why this practice adversely affects you

Once your credit is pulled and the trigger process gets started, trigger companies will strike while the iron is hot and immediately begin marketing to you – hard – because they know you’re looking for a mortgage. It will seem as if everyone has a “lower rate” than the next.

Don’t get me wrong. Competition is good, and it’s necessary for you as a consumer to shop around and get the best rate and loan package.

However, when you entertain multiple offers from various lenders it’s pretty easy to get a little off track with things. Many customers wind up with numbers for all kinds of loan scenarios.

In the end, you may spend time and money processing a loan application that may not save you the most money or even meet your original goals.

Since we help dozens of people every day who are in the process of shopping for a mortgage –and seeing the numbers they’re being quoted by other companies – we know how certain parameters are manipulated by competing companies to make their numbers appear better.

We came up with a 5-Point Plan When Shopping for a Mortgage to help ensure our customers are indeed getting the best deal out there – if that’s all they care about.

Of course there are other factors of equal or greater importance such as integrity, customer service and follow through which need consideration.

But if you want to just get jacked up about the numbers here’s how to go about it so you don’t get jacked in the end.

Rule #1: Know the exact amounts of your property taxes and insurance

If you plan to escrow your property taxes and insurance into your monthly payment, know before you shop how much those amounts are. If you allow companies to estimate these amounts for you, the payments and closing costs will be manipulated.

Rule #2: Allow each lender to pull your credit

Your mortgage rate is driven primarily by your credit score. All lenders rely on credit reports they pull themselves to price your loan. If you are trying to protect your credit by telling lenders you have your own credit report or know your credit score, the quotes you get with that are worthless.

Rule #3: Use the same home value with each lender

This is a biggie. Everything is based on the value of the home. To ensure lenders are providing you with sound numbers, you MUST use the same home value estimate with each one of them in order to compare.

Rule #4: Use the same loan amount with each lender

Same as home value, if you tell one lender you want to borrow $225,000 and another lender that you want $235,000, the $10,000 swing makes a huge difference in the rate you’ll be quoted.

Rule #5: Get all your quotes in writing

Any quote you receive over the phone is meaningless. The only quote that matters is the one you receive in writing – on the Good Faith Estimate (GFE).

The GFE is important for three reasons:

  • It’s required by law.
  • It gives you an estimate of your loan terms.
  • It lists your estimated settlement charges at closing.

Using GFEs from multiple lenders, you can then compare loans based on meaningful numbers including: home value, amount of loan, term, rate, and closing costs. If a lender delays giving you a GFE, go elsewhere.

No matter which lender you end up using, keep these guidelines in mind when shopping for a mortgage. And remember; always choose a company you feel comfortable doing business with.

Have questions about rates or loan products quoted by other lenders? Call our office at 877-878-0100.

We help people every day save money, pay off that junk debt, and find peace of mind. (Take a look at our Customer Reviews page for proof.)

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Help Your Loan Get Approved Faster

Help Your Loan Get Approved Faster

For the past twenty years, three standard mortgage practices have occurred behind the scenes during the mortgage process:

  • Verification of Employment (VOE)
  • Changing of the “mortgage clause” on your homeowner’s insurance (HOI) declaration page
  • Credit supplements, such as a Verification of Mortgage (VOM) or supplements to verify credit card or student loan monthly payments

In the past these three procedures have usually occurred without the applicant’s knowledge. The lender was just required to send in a copy of the applicant’s signed Borrower’s Authorization that gave written permission to release information. But privacy policies have tightened on the employer, HOI, and consumer-credit levels, and these standard practices now need the mortgage applicant’s verbal approval before they are completed.

If you are alerted by your Human Resources or Payroll Department that Meridian Home Mortgage is requesting a Verification of Employment, please give them permission to provide this information.

Likewise, if your HOI company lets you know they have received a request from Meridian Home Mortgage to change the mortgagee clause (basically just changing the lender name) on your insurance declaration page, please give your permission to make the change.

You may also receive a phone call from our credit vendor, CBC Innovis. This is the credit agency that Meridian uses to pull your initial credit report. Please work with CBC Innovis as quickly as you can to provide any needed information or perform any requested conference calls with your current creditors. This will help to expedite the underwriting process. If you ever feel uncomfortable returning a call to CBC Innovis or providing them with any requested information, please feel free to call your Meridian Home Mortgage contact first to verify their authenticity.

Following these three basic suggestions will help your team at Meridian prepare your loan file for underwriting in a timely manner. Please be sure to call at anytime to discuss further. We look forward to speaking with you soon.

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Your Loan is Reviewed by an Underwriter

Your Loan is Reviewed by an Underwriter

The most important step in the loan application process, after your home value is determined, is the loan review by a Conventional, FHA or VA underwriter.

It is important to know that before we submit your loan to an underwriter we do everything within our professional power, through diligent pre-processing, to make sure the underwriter has the ability to issue a Conditional Approval on every file. There are several things that you can do to help us move your loan to underwriting as quickly as possible.

Underwriting

The underwriter acts as a “gate keeper”, protecting the interest of the lender and safeguarding the limited funds they have to lend. Underwriters follow strict black-and-white guidelines established by industry investors. These guidelines are harsher than they were during the mortgage lending boom of 2002 – 2008. The days of what many industry professionals describe as “common sense underwriting” are long gone.

Once an underwriter reviews your refinance application they will issue one of three determinations: a Conditional Approval, a Suspension, or a Denial.

When a Conditional Approval is issued, a member of our Pipeline Team will call you immediately to review the approval and discuss any conditions needed before we can schedule your loan to close.

Rest assured that an underwriter issuing a Suspension or Denial on your loan does not end your relationship with Meridian Home Mortgage. This is where Meridian Home Mortgage steps in to defend you, as your advocate. We have an entire team at Meridian dedicated to overcoming underwriting objections, re-working your application, and unearthing underwriting errors.

Still, we will be candid with you at anytime during the process if we do not believe your application has an opportunity to close. Just know that we are devoted to exhausting every last ounce of effort to match your family’s financial situation to a qualified loan program.

While Meridian will be shouldering most of the work, we have come up with a small list of things that you can do to help ensure that your loan closes as quickly as possible. Please do your best to adhere to Meridian’s list of Do’s and Don’ts while your loan is being underwritten.

Here are a couple of other important things to know:

  • Turn-times vary
    Depending on the type of loan for which you are applying and the saturation of the current market, the underwriting process for your application may take up to 5-14 days. A large portion of Meridian’s service to you is to gently, but proactively, nudge the underwriter to review your file as quickly as possible.
  • Disclosure Mailings:
    You will most likely continue to receive loan disclosures throughout the process, either electronically or through the mail from your designated lender. Although there may be cover letters with these lender disclosures that state you need to sign and return them, there is no need for you to take any action. They are simply being sent to you by the lender so that they remain in compliance with State and Federal disclosure laws. Feel free to discard these documents.

We appreciate your cooperation and patience while your loan is being underwritten. Please do not hesitate to call with any questions or concerns that you might have. We look forward discussing your upcoming Conditional Approval with you very soon.

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Do’s and Don’ts While Your Loan is Being Underwritten

Do’s and Don’ts While Your Loan is Being Underwritten

Any change in your employment, income, or credit profile, no matter how small or seemingly insignificant, can adversely affect your loan approval. It is critical that you follow this list of Do’s and Don’ts while your loan is being reviewed by an underwriter:

  • Do make the minimum monthly payments on your consumer debt until your new loan closes and funds. Any deviation from this may negatively affect your mortgage application.
  • Do make sure that your mortgage payments are no more than 15-days late until your new loan closes and funds. As your application gets closer to settlement, please inform your Meridian Home Mortgage contact if you are at risk of paying your mortgage payment more than 15 days late.
    **Never pay your mortgage payment 30 or more days beyond the initial due date**
  • Do answer or return calls from the Title Company working on your application. On occasion there are outdated or unreleased liens which can cloud the ownership of your property, or similar situations which require the Title Company to contact you and request information to clear your title in preparation of your potential closing.
  • Do fax or email us any items that we request from you immediately. These items are required by the underwriter. All of the documents in your file have an expiration date. Every day that passes between the underwriter’s request and the time you provide them means additional items have the potential to expire. We will always be battling the underwriter to crunch time frames on your behalf and to immediately establish the first available closing date.
  • Do hold onto all of the pay stubs, bank statements, retirement account statements, pension statements and social security statements that you receive electronically and through the mail until your new loan closes and funds. You may be required to provide them.
  • Do not resign from your current job or retire during the loan process. If you have an opportunity to leave your current job for a better opportunity please reach-out to us prior to making a decision to determine how it might affect your loan.
  • Do not open any new credit accounts or apply for new credit accounts prior to your new mortgage loan closing. Any new account or credit inquiry can easily be identified by the underwriter and may put your application at risk. We understand there are life situations that arise, such as the need to apply for student loans to finance a child’s upcoming college semester. We ask that you discuss these types of scenarios with us prior to taking action.
  • Do not make any balance transfers on your existing credit card balances. Any new account or balance transfer may slow your mortgage application process.
  • Do not pay off any existing consumer credit accounts in full (e.g. credit cards, auto loans, etc.) unless it is through the natural progression of making your minimum monthly payment.

Following these instructions will help to prevent any delays in your loan closing. Please call us at anytime if you have any questions or if you would like to discuss any specific scenario.