When you’re ready to buy a home, there are so many things the right lending team can help you with to make sure the process goes smoothly and you get into the right home. HOWEVER, there are some things you could do to accidentally sabotage your home purchase that we want to help you avoid.
We’ve referenced a lot of these pitfalls in previous blog posts, but it definitely bears repeating so that you don’t make one of these common mistakes and potentially cost yourself your dream home.
1- Don’t make any big ticket purchases
Whether you’re looking at buying furniture for your new home, or a luxury car to go with your new luxury home, JUST DON’T! These purchases will impact your credit score and represent MORE DEBT, especially if you are opening a new line of credit. That will negatively affect your mortgage qualifications. Hold off on making these kinds of purchases until you have already closed on your home.
2- Don’t change employment status
Occasionally, even positive job changes can negatively impact your mortgage loan. But other changes like moving from employee to freelancer, full time to part-time, or salary to commission will look like a higher risk to lenders. Try to maintain your current position until you close on your new home.
3- Don’t miss credit card or bill payments
Missed payments on utilities or credit cards prior to qualifying for a loan could make you ineligible because it looks risky to lenders. It can delay your loan status and require new approval if it happens. If you have a separate income property and miss a mortgage payment, you could be ineligible for a loan for at least a year! At the very least, it will cause short delays, at the worst, you’ll be working to fix your credit for months or years before it is where you want it to be.
4- Don’t make big money moves
Whether you’re thinking of making a transfer, deposit, or withdrawal in sums larger than $500, we suggest you wait until you close on your house first. When you prequalify at the outset of the lending process, your lender has a picture of your financial position. Any changes to that will be put under scrutiny and could cause hiccups in the process. If you’re receiving a large sum of money, that may look like a loan that you will have to pay back, making you look like a higher financial risk. So delay depositing that big check, and even hold off on transferring the funds for your closing costs until you get the go-ahead from your lender just to be safe.
The bottom line here is that we want the lending process to be as seamless as possible. Your loan will come across an average of 8 sets of eyes as it transitions through from lender, to underwriter, agents and officers. We don’t want to give anybody a reason to question or delay the loan process. Keep your financial snapshot as still as you can, and once the loan closes, you can move forward with that money movement once again.
Ready to talk to a loan officer about what type of mortgage you might qualify for today? Contact us at EPM, and let us help guide you down the path to homeownership.