Helpful Information ~ Reverse Mortgage Long Island.com, Appraisal.

 1. Don't change your job before applying for a home loan. 

Also, now is not the right time to become self-employed or to quit your job.

2. Don't buy a new car -- now is not the time.  

Financing any form of transportation with a loan increases your debt to income ratio. When applying for a mortgage, it's best to wait.

4. Don't buy furniture on credit before purchasing a home. 

Buying new furniture increases your debt-to-income ratio. If your ratio is excellent, there should be no problem. And if there's money in your bank account, this should not affect you. However, it is best to save your money and buy after closing. Of course, you need a bed to sleep in, so don't neglect the necessity for creature comforts.

5. Don't be late on your credit card payments or charge excessively. 

Your credit report is a picture of how you spend your money, so take responsibility so lenders can see how you manage your money.

6. Don't make large deposits into your bank accounts.  Lenders check for what is termed "seasoning", where you can show funds have been in your bank account for a couple of months. Gifts that do not have to be paid back are fine, but lenders may worry you borrowed the money which is not permitted in mortgage lending.

7. Don't lie on your loan application. Tell the truth on your application. Fraud is not taken lightly on mortgages. It's against the law.

8. Don't co-sign a loan for anyone.  If you co-sign for someone else, this will increase your debt-to-income ratio, and you also become responsible if the debt goes unpaid; this can hurt your chances of getting a mortgage.

9. Don't apply for new credit cards or personal loans while applying for a mortgage.  If you open new credit card accounts or obtain a personal loan, it shows more debt when underwriters review your application.  Also, when you apply for a credit card, an inquiry appears on your credit report and can temporarily reduce your credit score up to five points. It's just not a good idea to take out new credit when applying for a mortgage loan. 

10. Don't spend money that you will need for closing costs. Closing costs are a huge part of a new mortgage on a home that you need to consider. Be sure to hold money aside for closing costs that you'll lay out of pocket on a purchase. 

An appraisal is an unbiased professional opinion of a home's value. Appraisals are almost always used in purchase and sale transactions whether residential or commercial.  They are commonly used in refinances. An appraisal is used to determine whether the home's value or contract price is appropriate when considering the home's condition, its location, and its features. Lenders who are refinancing a home are not going to lend a borrower money until they know that the home's value is worth the financing being provided.