Very recently I had a client change her career between the time I had secured her mortgage financing and the date the mortgage funded. Just two days before funding I received a call from the lender asking me to reconfirm her employment as there was a discrepancy on a solicitor document related to her employment. I immediately followed up with my client and indeed; she went from being a practicing nurse to teaching nursing. While one may think that is not too big of a deal, especially if the income is almost the same, the fact remains that it is not the same job that was stated on the mortgage application nor is her new employment in the same field. The fact that she was on a rather long probationary period as a new instructor only made this situation worse.
After numerous emails, phone calls and new income supporting documents to support the application the deal funded on time and my client is happy in her home.
This situation resulted in unnecessary stress for all involved and it could have been avoided. But it did make me think of other issues that could mess up a mortgage closing and here they are…The top 5 things not to do before your mortgage closes:
#1 Don’t quit your job or change industries without consulting your mortgage broker first!
#2 Don’t do anything that would reduce your income. Getting a raise is good but dropping from Full Time to Part Time status is not a good idea.#3 Don’t apply for new credit. While you are excited about getting into your new home, now is not the time to buy all new furniture on credit or buy a new vehicle or any large purchase. Wait until the mortgage funds and then you may go shopping!
#4 Don’t get rid of existing credit. For the same reason why it is not a good idea to take on new credit, it’s best not to close any existing credit either. The lender has agreed to lend you the money for a mortgage based on your current financial situation and this includes the strength of your credit profile.
#5 Don’t co-sign for a loan or mortgage for someone else. You may have the best intentions in the world, but if you co-sign for any type of debt for someone else, you are 100% responsible for the full payments incurred on that loan. This extra debt is added to one’s liabilities and may very well throw the debt servicing ratios way out of line.
Once the mortgage has funded the borrower is free to change careers, close all their credit facilities or buy a new truck…just don’t do it before or during the mortgage application period.