Just because you?re buying a home doesn’t mean that life has to stop, but you never know what affect your actions will have on the mortgage you apply for in three or even six months.
Here’s what you should avoid doing before buying a home.
Purchase a Car. Many people are inclined to improve their social standing by purchasing a car and buying a home at the same time. There’s nothing wrong with that.
But purchasing the car before buying a home will have an effect on what your mortgage lender determines you can afford for a home purchase. Buying a car can greatly raise your debt-to-income ratio, which lenders use to determine how much of a mortgage you can afford.
A car purchase will decrease the amount you can afford to pay for a home.
Make a Large Purchase. Of course you are going to need furniture when buying a home, but resist the urge to purchases a new sofa set until after you have obtained the mortgage.
Big ticket items purchased before buying a home can cause the lender to take a second look at your financial situation.
When you are buying a home, it is best to stay away from anything that will make it look as though you don?t your finances under control.
Move Money Between Accounts. When the lender does the work to determine your eligibility for a loan, they will request statements from all of your accounts that contain liquid assets. When you move money around between these amounts, especially if they are large amounts, you will have withdrawals in some and deposits in others.
The lender will request the documentation for these. Unless you want to keep up with all this paperwork, it’s much easier to leave the money where it is until after you have completed buying a home.
Change Banks. Just like the above example, changing banks creates additional paperwork for you and the lender. To make it easier on yourself and the lender, stay with your current bank until the mortgage is complete.
Become Self-Employed or change jobs if you are employed part-time. Either of these could have a negative affect on your mortgage approval.
In most cases, lenders want to see at least two years of self-employment they will approve you for a loan. Wait until after buying a home to become self-employed.
For part-time workers changing jobs creates unpredictability in the number of hours that you will work from one week to the next. As such, the lender cannot determine your gross income to qualify you for a loan. Stay with your current job until you have the loan, then change.
Apply For a Credit Card. Even though the inquiry won’t hurt your credit too badly if you already have a good credit score, the additional credit card will cause the lender to question your financial stability for buying a home.Download A Free Ebook That Shows You How You Can Make $2000 Plus Per Deal From Real Estate:Free Real Estate Profits Ebook