This is a great list to help ensure you avoid any of the possible pitfalls during the process of purchasing a home.
10 COMMANDMENTS TO
PRE-APPROVAL & YOUR MORTGAGE
( better known as things NOT to do while obtaining a mortgage loan. )
1. Thou shalt not use credit card excessively, make major changes to credit card balances, or let accounts fall behind.
This one is important because many people think opening a credit card is the only change that could effect your credit score. That is not the case. Open, closing, paying down a card…all of these things can effect your credit positively or negatively. Make sure to speak with and strategize with your lender about any changes you are considering making while in the process of purchasing a home.
2. Thou shalt not change jobs, become self employed or quit your job.
Lenders require a history of employment when approving you for your loan. Changing jobs, fields, or status can effect your ability to be approved. Stay put.
3. Thou shalt not buy a car, truck, van, motorcyle, jeep, ferris wheel….we think you get the point.
No major purchases during the time from when your lender issues the pre-approval until after closing on your home. Large purchases may negatively impact your debt to income ratios, cash to close, and/or credit scores.
4. Thou shalt not originate any inquires into your credit.
This on goes right along with #3. If you are considering a major purchase (aka the car, truck, van, motocycle, jeep, ferris wheel, etc) do not go hardcore researching to see if it is possible just yet. No additional credit pulls while you are buying a home.
5. Thou shalt not spend money you have set aside for closing.
You are getting a loan for a large portion of your real estate purchase. However any money you have set aside for closing costs, downpayment, and inspections make sure to keep those funds available.
6. Thou shalt not buy furniture, appliances, or flooring until afterclosing. (Even if it is Black Friday and this is the last one on the floor kind of good deal!)
I’m going to tell you a true story. In my 12+ years in the real estate business I have seen a lot of things. One of those included a young gentleman who after reviewing these 10 commandments did not follow them as closely as we recommend. He went out on Black Friday…and well you know how this goes. He purchased a refrigerator on a 0% interest 6 month term finance. Unfortunately this put his debt to income ratios just a hair over the line and he was not able to move forward with his loan until he got that back down. The other side of this is that the house is not yours until it is closed and in your name. So it is just good life advice not to be making major purchases before closing. Don’t put the cart before the horse, if you will. Now, we love a good shopping trip to plan… so don’t stop planning and dreaming about what you will need for your new home just hold off on putting the credit card on the counter.
7.Thou shalt not omit debts or liabilities from your loan application.
No lying to your lender! Mortgage fraud is a big deal and we won’t come visit you in jail. Tell the truth, make a complete application and get your loan fair and square.
8. Thou shalt not make large deposits or withdrawals in or out of your accounts.
Your mortgage lender and their underwriter are looking for status quo when it comes to your bank account activity. They don’t want to see major dips or humps that could indicate change. If you are obtaining a gift for down payment assistance please speak with your lender on how to handle this.
9. Thou shalt not change bank accounts.
Again, same thing with keeping your accounts status quo. No major changes during the process of purchasing your home.
10. Thou shalt not co-sign a loan for anyone.
This one is just good life advice. =)
When you or anyone in your circle are considering buying a home, selling a home, a career in real estate, or just have any random real estate questions I am here to help! Give me a call at 918-232-4488 or DM me on Messenger anytime.