The homebuying process can be an exciting and life-altering commitment. Getting prequalified is the key first step, but there are some things that you should avoid doing once you begin the home loan process.
We qualify you based on your employment at the beginning of the process. If that employment changes, then so does the income that we can use to qualify you. In short, don’t switch jobs, become self-employed or quit your current job.
When you buy a car or a boat, your credit is pulled. Frequent pulls on your credit can diminish your score as well as add significant monthly debt. We pull credit at the beginning of the process and then also take a “soft” pull of credit right before closing. If we see significant changes to your credit score and your monthly debts in that soft pull, you may no longer qualify for financing.
Late payment and increased debt do not bode well for the strength of your credit. Continue to make payments on time and keep your credit card balances in check so you can maintain the same strong score that you were qualified with.
Nearly every borrower will have to bring cash to close. If you cannot bring the cash you need to the table, then closing cannot be completed, and you will not be able to close on the home.
We know how tempting it is to buy new furnishings for the home you are anxious to move in to. However, credit it often pulled when you buy new furniture (unless you’re paying in cash). Even if the furniture retailer guarantees that you will not be charged until after closing, there will still be inquiries on your credit report and, sometimes, the debt reports immediately as well.
New inquiries come about anytime someone pulls your credit, whether this is from buying a car or new furniture. Freeze those finances until after closing has been finalized. However, inquiries from utilities or cable providers for your new home are fine.
With some loan programs, all large and/or irregular deposits must be tracked. Tracking deposits requires a greater deal of documentation than other programs, and we want to limit the amount of times that we request documentation from you, as well as the amount of documentation we have to request from you.
Consistency is key as you go through the loan process. If you switch banks in the midst of the process, we will have to track the movement of funds and may have difficulty obtaining official statements in a timely fashion.
Co-signing will add additional debt to your liabilities. Adding debt but not increasing your income is a red flag because we may no longer be able to demonstrate that you can support the amount of debt you already have, plus the proposed house payment.
Here’s the thing: we don’t expect you to be an expert on all of this. That’s why we have spent years training, learning and growing into the experienced team of originators that we are. Give us a shout, we are here to help!