The 5 Worst Things You Can Do Before Buying A Home
The 5 Worst Things You Can Do Before Buying A Home
Cynics may scoff, but getting under contract on the right home can turn even the most stoic shopper into a bit of a dreamer. From paint colors to planting a garden, picturing yourself in that property is critical for many buyers.But leave a little room for pragmatism. Remember that getting pre-approved for a mortgage and even under contract isn’t a guarantee. That prefix is there for a reason. Loan pre-approval is not loan approval.You’ll have more hurdles to clear before a lender legally commits to funding your home loan. Buyers who don’t know any better can inadvertently add obstacles to that path — or even kill the entire deal —between contract and closing day.Some missteps can be costlier than others. Here’s a look at five of the worst things you can do before buying a home.1. Go Credit-CrazyIt’s almost become cliché in the mortgage industry, but the warning still bears repeating: Don’t buy a truckload of furniture until after your loan closes. The prohibition goes beyond sofas and settees — avoid obtaining credit for any major expense, such as a car, a boat or, yes, a new bedroom set.Be careful with even minor expenses. If you absolutely need to obtain new credit or accrue debt before closing, talk with your loan officer as soon as possible.New payments are going to affect your monthly debt-to-income ratio (and residual income on a VA loan), and not in a good way. Hard inquiries on your credit report could also lower your credit score. That might hurt your interest rate if you haven’t locked or even knock you out of qualifying range all together.2. Shuffle Dollars and CentsLenders will scour your most recent bank statement as part of the pre-approval process. It’s not like they forget about it after that. They’ll take another look at your assets and bank records again during the underwriting process.You’ll need to explain any unusual deposits or withdrawals. Lenders will require clear documentation and a paper trail if you’re putting gift funds toward a down payment or closing costs. Stuffing a wad of undocumented cash into your account is going to raise some red flags.3. Get Behind on BillsHaving a late payment hit your credit report before closing can devastate your deal. Payment history comprises about a third of your credit score.One solitary 30-day late payment can clip 60 to 110 points from your credit score. Maybe not a huge deal if you had an 800 score, right?Possibly. But if that 30-day late blemish is a mortgage or rent payment, some lenders will boot your application altogether. Many will require at least 12 consecutive months of on-time payments to qualify for a home loan.4. Co-Sign on a LoanCo-signing a loan is arguably a bad financial move whenever you make it. But it’s especially risky during the mortgage lending process. It means you’re financially liable for someone else’s debt.Yes, that someone else might be the most responsible person on the planet. Lenders will still need to factor that new monthly obligation into your overall affordability profile. Adding one more debt to the list could stretch too thin your debt-to-income ratio and assets.5. Changes in EmploymentProbably goes without saying, but losing your job is going to be a big problem. Even job-hopping can present some major hurdles. Lenders crave stable, reliable income that’s likely to continue.Lenders are likely to slam on the brakes if you take a new job in a different field. Or if you decide to start your own business. Or even if you get a promotion but see some or all of your income shift to a commission basis.The bottom line: Any change to your employment is significant. Keep your loan officer in the loop, and ask questions when in doubt. The last thing you want is to waste time and money on a home loan you’re never going to get.Throughout the mortgage process, it can also be helpful to monitor your credit scores for changes so you can know whether you need to address any problems. To do that, you can use a free tool like Credit.com’s Credit Report Card, which updates your credit scores and an overview of your credit report every month.———This article was written by Chris Birk and originally published on Credit.com.
Author:Joni Smith Phone: 972-998-7790 Dated: February 3rd 2014 Views: 946 About Joni: I have been with Halo Group Realty since January 2014. I received my Real Estate Certification thro...
We understand that for many people, buying or selling a home is probably the largest investment decision that they will make in their lifetime. Halo Group Realty LLC thus became active in selling Real Estate in 2008 and was setup to make this process a simple and painless transaction. Your dedicated agent will guide you every step of the way to make purchasing or selling your home enjoyable and exciting… as it should be!
Today, Halo Group Realty LLC is at the cutting edge of technology in offering assistance to those in need of real estate services, and we have revolutionized the method of delivering education to consumers. Halo is established as the place for consumers to get the knowledge and assistance they deserve in the process of facilitating the Real Estate transaction, positioning you in the best possible situation to get the best price when you either to buy or sell. With leadership, innovation and forward thinking, Halo Group Realty, LLC is poised to make a huge impression in the real estate market while providing clients the keys to home ownership.
Our goal is to help make your dream a reality and take away all of the stress that goes along with purchasing or selling your home. Whether you are purchasing new construction, an existing home, or just an open space for future enjoyment, representation by a Halo agent is a valuable tool in making your dream become a reality.
Updating your home to be more chic - without looking cheap - is comple
You have been the best real estate agent that I have ever dealt with. Your advice was invaluable. When I called you, I was about to give up on ever finding a home and you gave me hope. You showed me that there are agents out there that put more value in people than in profits. Thanks to you, we are moving into a wonderful home.
Thank you so much,