Buying a house hinges on many important things: finding the right property and builder, negotiating a price you can afford, and securing financing to pay for it.
Many homebuyers successfully navigate all three criteria – only to make some significant mistakes before closing the deal that could jeopardize their home dream. When buying your new house, do not miss anything and dos.
Not only does pre-approval ensure that you are shopping for homes with a price range, but it can speed up the process when the right home is found. Federal regulations restrict what a lender may send to a non-qualified applicant.
“If there is no pre-approval and the application is received at the same time as the contract, the lender cannot send a list of items to be received and reviewed (tax returns, W2s, payment stubs, bank statements) after receipt Is signed and sent, says Joan Dumis, a senior mortgage adviser at Bancorp South in Austin, Texas, Texas. It can delay the process by one to three days.
Check your credit report.
There are many websites to check your credit score. You may be surprised to find many unsolicited credit inquiries from various vendors who wish to offer you a credit card or loan. Excessive credit inquiries can negatively affect your credit score – but you can prevent exiting through the 800-number given in your credit report.
Do not change jobs
Some buyers will change jobs without telling their lender because they feel it is a better salary. wrong. Most investors require a full 30-day salary, so there will be a delay in changing jobs until 30-day paperwork is received.
In some cases, it may even kill the deal altogether. Doumis recalls, saying, “I was once a borrower who used to tell me that he was headed for signing closed documents, that he had just retired.” “He was to pay cash for the house because we used that income to make him eligible.”
Continue to pay for credit cards and other debts.
There is probably nothing more important to your loan than your FICO score. This affects your rate, schedule, the cost of any mortgage insurance, and your dangerous insurance. Make sure you pay any credit card bills on a regular basis and continue on car or other loans. And, do not open or close a credit card or get a cash advance on a card or credit line.
Do not make major new purchases on credit
Real estate broker Shelley McLaughlin said that you don’t want to make any major purchases until after closing on home shopping.
For most borrowers, using their existing credit card for nominal expenses will not affect them, but opening a new loan can delay the closing. Consult with your lender before making any major-to-normal purchases before closing.
Expect a final credit check before closing the loan.
Even if you have been pre-approved for your new home loan, your lender will conduct a final check before issuing all your clear to close the home purchase.
Even the smallest thing can affect a borrower’s debt-to-income ratio and their ability to buying a house. For example, a buyer had a small college loan reset that occurred just before his ratio was closed, which led to the loan not being approved. Unfortunately, this left a domino effect for three other homes, buyers, and sellers involved in contingency offers.
Bottom line, the time between loan pre-approval and loan closing should be considered a “quiet period” during which you must not do employment, residence, loans, or anything that may affect your credit.