Rick BissonFor many people, buying a home requires securing a loan. Whether the loan is conventional FHA, VA or USDA, there are certain “Dos and Don’ts” that may affect the outcome of a loan request. These guidelines remain in effect before, during, and after loan approval – up until the time of closing when your loan is funded and recorded.

To maintain credit worthiness throughout the home buying process DO follow these ground rules.

Be sure to gather all the necessary paperwork to obtain a loan. Today, a loan application requires employment pay-stubs from the last 30 days, W-2 Forms and 1040s from the last two years, all bank statements from the last two months, IRA/401K retirement savings statements (if being used for transaction), current photo ID, signed Intent to Proceed form, and appraisal fee.

Business and personal tax returns for the last two years are required for those who are self-employed. If a home is already under contract, include a copy of the purchase and sale agreement, a copy of the front and back of the earnest money deposit check, and a copy of the legal description, or deed of the property.

Get in the habit of keeping the lender up to date. Be sure to inform the lender if gifts from a relative, employer, or not-for-profit organization are expected prior to closing. Communicate any expected payroll, pension, Social Security or income tax refund deposits. Identify any depletion of funds needed to complete the purchase. Discuss the interest rate, a mortgage interest rate lock, agree on when to lock the mortgage interest rate, and have a plan for closing before the lock expiration date.

If employment income is required for loan approval, stay employed. If a loss of income or any reduction of income occurs, notify the lender. Also contact the loan officer about any employment changes such as recent raises, promotions, transfers, or changes in pay status – for example, shifting from salary to commission.

Pay all current debt obligations, including any current mortgage, car, student loan or credit card in a timely manner. Provide all documentation for the sale of vehicles and the sale of any other significant personal assets. Keep all originals, and have access to all pay-stubs, bank statements and other important financial documents. Contact the loan officer of a change of current address, phone or email.

DO NOT do any of the following prior to, or during, the loan process.

Do not close or open any asset accounts or transfer funds between accounts without receiving the correct documentation required for the loan. Don’t change jobs or employer without inquiring about the impact this change might have on the loan.

Just prior to closing the lender will pull a final credit score. Any blemishes on that report, changes to assets or missed payments may jeopardize the loan. To protect your credit score and keep the loan process moving along, avoid the temptation to make major purchases such as a new car, furniture, appliances, etc., until after the closing.

And don’t open or increase any liabilities, including credit cards, student loans or other lines of credit during the loan process. A cash advance on a credit card and late payments are also “no-nos.”

Do not wait longer than the time frame given by your Realtor or lender to provide the necessary paperwork and/or signatures. Many deadlines are inflexible and failing to meet them may result in loss of contract.

Successfully securing a home loan requires a great deal of patience, careful planning, restraint and resolve. Talk with your trusted, expert Realtor and lender, seeking their wisdom and knowledge. Be sure to save, save, save; stay employed and pay bills on time. All this hard work and dedication will be rewarded at the closing table and for the life of the loan.

This column is produced by Rick Bisson and his family, who own Bisson Real Estate with Keller Williams Realty of Midcoast and Sugarloaf.