Mortgage

Why was my mortgage denied in one bank but not in another?

One of the reasons is because each bank has a monthly quota to meet. For example, if a bank has a maximum capacity to approve 100 mortgages per month, and you are application #101, that is an automatic rejection.

But if you go to another bank, they may have the same capacity of 100 mortgages but you turn out to be application #80. In that case, you are likely to be approved. Other reasons may be the following mentioned in this video:

If I use the credit cards for the down payment, wouldn’t that have a negative impact on the mortgage application?

If you are using business credit cards, then it should not impact you in a negative way. But if you decide to use personal credit cards, make sure that the total credit card utilization stays under 30% (refer to week 1 for more details)

What can I expect after asking the bank to remove my escrow? Who do I pay insurance and taxes to?

The process would be approximately the following (remember that each bank is different):

1. You make a request to close your ESCROW account. The bank will send you a check with the funds they have set aside for ESCROW to date. You will deposit that check in the bank account that you use to pay your mortgage. Once the money is available in your account, you can use that money towards the principal of the mortgage.

2. When it’s time to renew your home insurance (done annually), the insurance agency will first contact the bank for payments. And if the bank does not respond (and they will not because the ESCROW account will be closed by then), the insurance agency will end up contacting you. When the agency contacts you, you can make the insurance payment with the 0APR card.

3. The same process happens with property taxes, the city/county/municipality will contact the bank first. If the bank does not respond, the city/county/municipality will contact you. When they do, you pay your taxes using the medium that works best for you.