So you’ve made a decision to buy a home and intend to apply for a mortgage to fund your purchase. From now until you close, there are a number of simple, yet important mistakes you want to be sure to avoid. Even if you have good credit, there are things you can do to make lenders think twice and it is your responsibility to make sure that doesn’t happen.
Here are 10 things you don’t want to do while you’re in the process of buying a home.
1. Don’t change your job before applying for and securing your home loan. Along with that, now is not the right time to become self-employed or quit your job. You want to show lenders stability, which means you’ll be less likely to default on the loan.
2. Don’t change banks. Like your employment, you want your banking history to show stability.
3. Don’t buy a car or truck or any other form of transportation that you have to finance. Buying one increases your debt-to-income ratio and that’s something loan officers don’t want to see.
4. Don’t buy furniture on credit before buying your house. Like financing a car, charging big-ticket items increases your debt-to-income ratio and now is not the time.
5. Don’t be late on your credit card payments or charge excessively. You need a track record of responsibility and show that you can manage your money and you want to keep your credit utilization ratio to a minimum.
6. Don’t make large deposits into your bank accounts. Lenders like the money that will be your down payment to be sitting in your account for at least two months – what they call “seasoning” – so that the funds don’t just appear out of no where.
7. Don’t lie on your loan application. Sounds simple, right? But don’t leave out any debts or liabilities you have or fudge your income. It’s fraud.
8. Don’t co-sign a loan for anyone. Even if you’re not the one making the payments on that loan, it increases your debt-to-income ratio.
9. Don’t have inquiries made into your credit. Looking for new credit translates into higher risk for lenders. If your inquiries are related to your mortgage search, it usually doesn’t affect your credit score because the assumption is you’re rate shopping. But opening credit accounts within a short period of time represents some risk and your credit could take a hit. It’s probably not a huge factor in your calculating your ability to repay a loan but why take a chance at this juncture?
10. Don’t spend your money the money you’ve saved for your down payment and closing costs. Part of the price of financing a loan is the closing costs and you’ll likely have some responsibility for paying them. Make sure you have enough for your share of the obligation.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please give us a call and we’d be happy to assist you!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Downtown Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Galena 43021 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington 43147 Polaris Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235