Buying a home is a very exciting process especially after getting your pre-approval and just waiting on the loan approval process. But one has to be careful as your approval may not be as secured as you thought if you made some mistakes during the process.
Here are some of the items to avoid when buying a new home.
Getting a new credit card is a big NO NO!
Whenever you apply for a new credit card, the company will run an inquiry on your credit score, from which it can cause lowering your credit score due to the hard pull. Lower scores can end up cancelling your loan approval or at least change the rates you’ve initially been pre-approved for.
Avoid taking out new loans or getting a new car.
Getting a new loan will reduce your debt-to-income ratio, a vital factor in determining if you are qualified to get a loan for your new home.
Look away from cosigning for someone else.
As a consignee, you are financially obligated for the payments of the loan in the event that the primary has defaulted. Despite not being the primary, the loan would still appear on your credit report until the entire loan has been paid off.
In case you have cosigned already, one year’s worth of bank statements from the primary to show to your lender that they are making their own payments.
Don’t switch jobs.
Lenders always take great value on your employment history and current status. Any sudden changes on your job status can make them wary of issuing a loan.
Many lenders would like to see that you’ve spent at least 2 years with the same company. This gives them an assurance of your stability in making regular payments in the future.
Delay on any consolidation of debt.
Your mortgage approval is based from your debt status and credit score at the time that you have applied for the loan. Any changes can potentially disrupt the loan approval.
Pay your current bills on time
The lender would run another credit check before finalizing your loan approval. Missing out or getting delayed on your payments can cause a negative effect on your credit score.
As suggested earlier, any changes on your debt status or credit score can potentially disrupt the approval process.
Buy furniture a bit later.
One can’t help being really excited during this process and setting up your home with new furniture is automatically a part of it. But you may want to delay it since adding in more debt can possibly put your loan at risk. Better wait for the official closing before you start shopping.
In summary, adding debt or making any changes on your current status can possibly hold off the approval for your new home. It is recommended that you always talk to your lender before making any changes to be certain if you need to put them off or if it’s safe for you to continue.
Another big help is to consult with your local realtor. You can learn from their experiences and expertise on “what to do” and “what not to do” when buying a new home.
Michele Frasure is a very experienced realtor with 10 years of experience. She is open to help and consult with anyone who is planning to buy a home; may it be your first time buying or not.
Why work with us? Learn more here: www.livesellplay.com/buynow