There are right and wrong ways to go about handling your finances during the mortgage process. Doing some of these things could delay or jeopardize your ability to buy your home. Here are some of the things that you shouldn’t do once you’ve started making a new home purchase.
Don’t Purchase Large Home Items
You may be finding it difficult to reign yourself in when it comes to planning for your new home. Making those larger home expenses before you’ve finished the process could cause you to drain your bank accounts. You may find yourself unable to afford the closing costs or other expenses that arise. Try to contain your enthusiasm until you can get settled into your new home. This will help you to establish your new budget.
Don’t Wait Until the Last Minute to Get Pre Approved
The process takes time the more time you set aside for talking to lenders the better rate you will get. Take the time to shop around… this is probably the biggest purchase of your life a 1% difference in rates can save you literally thousands of dollars over the life of the loan. In “tight” markets speed is of the essence in locking in a deal so a pre-approved buyer has the speed advantage over a non-approved buyer. Also real estate agents take you more seriously if you are already approved.
Don’t Overuse Credit
Your credit is under close scrutiny while you’re undergoing the loan approval process. The lender is keeping close tabs on your level of risk to determine if you’re a good investment. This means that you don’t want to max out your existing credit limit. Another thing that you don’t want to do is to open up or close any of your existing lines of credit. Leave your credit alone during this timeframe. This could cause a delay in the home buying process.
Don’t Change Employment
In order to qualify for a loan, you need a steady source of income. Some lenders will require that you have at least two years of employment at the same place of business. Quitting or changing jobs midstream may cause the lender to cancel your application for the loan. If you have to leave your place of employment, have a discussion with your loan officer. They may be able to make a case for you to continue with the lending process.
Don’t Make Large Bank Transactions
Large deposits or withdrawals may send up a red flag for the lending agency. They may be questioning your ability to handle your finances during this crucial time. Hold off on these types of transactions until after you’ve moved into your new home. You want to demonstrate consistency when it comes to your financial situation. If you require large amounts of money to be moved, it can call into question your abilities.
Follow these tips so that you can purchase the home that you’ve always wanted without a delay involved. Another thing to consider is finding a mortgage broker that will help you through the process.
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