#17 How Changes Can Affect Your Pre-Approval


It is important to remember that when your Pre-Approval is established, it is a snapshot of your (financial) life at that moment!   As you know, many aspects of your life were examined in order to determine your financial stability, your credit status and your employment history – just to name the principal factors.  You might say that awarding your Pre-Approval makes the statement that, at that time, you are a good candidate (a good risk) for the loan you need in order to buy that home you have been working toward owning.

Life being what it is, changes do happen.   Some may be minor and have no appreciable impact on the stability of your Pre-Approval.   Others, however, can bring your entire home buying project to a screeching halt!  Or, maybe just a pause.

It is in the context of possible changes that conscientious communication with your Loan Officer is most important and most critical.    Discussing an important change with your Loan Officer after the change has occurred is just backwards!   When you sense an important change must happen or might happen, immediately contact your Lender and discuss the possible consequences.  There may be ways to effect the change without disturbing your Pre-Approval status.

A typical change that may occur is a change in your employment status.   It’s important that your income stream be legitimate, traceable and dependable.  If the change occurs, for instance, in the way you are paid within your existing employment structure,  but does not disturb its stability, there still may be cause for concern.  Maybe you are promoted or given a raise!   However, an employment change that de-stabilizes the dependable numbers on which your Pre-Approval was based can be a problem that may stall your home purchase process.  Losing a primary source of your income, the need to find new employment, or circumstances that may make it difficult for you to find new employment are all situations that your Loan Officer must know immediately.

Some important changes may be through no fault of your own, but may still cause your process to require re-evaluation, pause or even a full stop.   An accident may happen that disables a person from pursuing their work temporarily.  Your Loan Officer will know how to proceed, evaluate your cash flow through recovery and back to normalcy, and advise you as to how such a situation impacts your Pre-Approval – if at all.

Changes in personal relationships can also create problems for the integrity of your Pre-Approval.   Everything from a change in marital status to news of an “unexpected” expected baby can change both the financial parameters and the specs for the needs!     It isn’t that such good news becomes bad news – it just may change the numbers, the requirements and the “suitability” of the existing Pre-Approval.

When you bring “change information” to your Loan Officer, it is important to listen carefully to their advice, and to follow that advice.  It may mean that some of the documentation must be re-drawn and that new facts, figures and information must be assembled.  It may feel like you are backsliding!   That assumption would not only be wrong, but could be unnecessarily discouraging.   Remember – your Loan Officer is also your advocate and wants to do what’s possible to keep your home purchase process on track!

Changes happen – small or significantly large, but most can be managed.   They are easier to manage, in the context of your home purchase, when there are no surprises for your professional team.   Keeping important information away from your Loan Officer because you “don’t want to upset the apple cart” could be exactly what upsets it in the long run!   So, keep the lines of communication open, and keep your eye on your
goals!

Comments

Post a Comment

Popular posts from this blog

#56 About Insurance

Image
The decision to buy a home of your own, includes both the consideration of, the added expense of and the mandate to carry the appropriate insurance coverage for the property you are considering.  It’s a “given” that qualifying for your Mortgage Loan means your new property must be insured to protect the property you do not actually own until your Mortgage loan is fully paid. Many factors drive the amount and the kind of insurance you must carry for your specific property.   The recent factors of repeated (and repeated!) wildfires and floods have inspired many new insurance considerations and changes that directly relate to both of those “natural” disasters.    It is not that floods and fires did not exist in the past.   However, the more recent phenomenon, of wildfires originating miles away then sweeping across densely populated areas some distance from their point of origin, is seriously impacting fire insurance availability and limits.    Ne...
Read more

#58 Preserving an Interrupted Plan

Image
When making almost any kind of a serious plan, it’s probably smart to also consider the possibility of some kind of a glitch creating some kind of an interruption!   Interruptions to a plan for purchasing your own home can come in dozens of ways, from any number of directions.   But, understanding that reality, and accepting that “possibilities” may come up, shouldn’t be a reason to worry unnecessarily or become a bundle of nervous “what ifs.” Challenges, and many perfectly normal life situations, might arise and interrupt the original rhythms and timing you have developed for your master plan.    Most such things can be managed, and need not critically damage your plan.     An interruption to how you want things to proceed will probably just mean adjustments, modification and a little finagling! What’s most important, when the unexpected happens, is to keep your sights on your plan as a whole.   For instance, an employment status ...
Read more

#57 Windfalls and Nest Eggs

Image
They are definitely connected!  Understanding both – and their possible positive potential – can make measurable differences in your financial life! Having a formula, some disciplines and a plan for money to reserve may sound like an old fashioned homily, but savings don’t just happen – savings accumulate by determination and repetition.    When an unexpected “windfall” drops into your hands, it can be added to your existing reserves, or it can be a beginning to what you may have been intending but never quite got around to: some savings! Windfalls have several sources! A simple one might be an unexpected raise in pay, or an unexpected bonus!   The key determinator here is “unexpected.”   We all know how easily it can just disappear into the cash flow that’s already flowing! But, wait a minute.   Before it happened, you were probably making ends meet, one way or another, right?   Well, you now have an opportunity to treat a Windfall diffe...
Read more