The 10 Commandments of Mortgage Financing

Written By: Tanisha Daniels

This is an oldie but goodie set of “common-sense” rules that we in the mortgage industry know, however as another layer of servicing our clients I thought it’d be a great
checklist to keep with your other resources.

1. Thou shalt not change jobs, quit your job or become self employed during the loan process. Your current (not potential) income is used to support your qualification of your mortgage loan – if you change this before the loan closes you may not qualify as your application would have to be re-underwritten to support your job change.

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2. Thou shalt not co-sign for any loan for any one. Your qualifying ratios are based upon your reported liabilities and your qualifying income. So, if you add additional liabilities into your ratios by co-signing for someone, you may not qualify due to the debt-to-income and housing-to-income ratio guidelines.

3. Thou shalt not buy a vehicle or any large purchase during the loan process. Inquiries on your credit report are also viewed as part of the underwriting process and all inquiries generally within the last 90 days must be explained. So, even shopping for a car may be addressed by the underwriter.

4. Thou shalt not use credit cards excessively and thou shalt make all payments on time. Keep in mind your credit is generally ran at origination and again at closing by the underwriter as part of the pre-funding audit, so any late payments or increases in your reported monthly payments will be addressed prior to closing your loan.

5. Thou shalt not spend funds you’ve set aside for reserves. Even though you generally must provide a Verification of Deposit to evidence the available reserves, if you spend the funds prior to closing, you jeopardize delaying your closing or even loan denial.

6. Thou shalt not omit any liabilities or debts on the loan application at origination. Underwriting prudence requires that all your debts and obligations be considered to support qualification for mortgage financing. Any qualifying debt found during the analysis process will be included whether it is reported or not, but better to disclose than explain – it will give your Loan Officer a strategy to help assist you in the qualifying process.

7. Thou shalt not buy any furniture, appliances or household items during the loan process. Many homeowners are anxious to furnish their new home, however this must be a part of the “housewarming” party after you receive the keys. Remember, even those “No Interest Until 2014” credit offers affect you. The underwriter will generally use a percentage of the total credit line you received to calculate the payment and count that against your liabilities. If those ratios have little “wiggle room” a credit tradeline like this could make all the difference.

8. Thou shalt not make large deposits into your banking institution without first checking with your Loan Officer. All large deposits require an explanation to the underwriter. If you’re expecting a bonus deposit from your employer, a gift from your grandparents or a refund from your tax returns, share that information with your Loan Officer – it will help him/her present your complete loan file with this information disclosed upfront.

Need FHA Training? CLICK HERE:

#9) Thou shalt not change banking institutions during the loan process. Remember, asset guidelines generally require the account stated to have been open for at least 90 days, so a new account would not qualify.

#10) Thou shalt return all communications received. All emails and voicemails should be returned within 24 hours. This will ensure that all parties remain informed of the loan progress and that your loan closes smoothly and on time.

About The Author

Tanisha Daniels - As an NAMP® staff writer, Tanisha Daniels is a lead instructor for Loan Processor University ( as well as has over 10+ years mortgage experience. She has used her baseline experience in loan processing to contribute to progressive and successful roles supporting Retail, Wholesale, and Correspondent clients. She has worked as a frontline and post-closing Underwriter, Account Executive, and Loan Modification Processor. She currently works as a contract Loan Processor for 2 small independent licensed Retail MLO’s. If you're interested in becoming a writer for NAMP®, please email us at:


Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.