When you are buying a home or refinancing your mortgage, there are some important do’s and don’ts! Some may be obvious, others you may not think about. We hear about the buyer that wants to buy furniture or appliances right before closing because it’s on sale. Well, that may mean you don’t close – it depends on what it does to your credit, your debt to income and your cash in the bank – it may be enough to deny your loan! Here is a list of things to do and not do when buying a home.
DO:
- Get pre-approved before looking for a home
- Make sure you are making all your monthly payments on time
- Keep track of all your bank deposits and keep a copy of any checks you deposit.
- Find your personal records, such as your w2’s and tax returns for the last 2-3 years, bank statements and any other personal items such as divorce decree or bankruptcy documents
DON’T:
- Apply for new credit – even that credit card to get a store discount!
- Change jobs, pay structure or employment status – going from salary to commission may mean that you will not qualify for that mortgage. Going from a permanent position to a contract employee may also mean you may not qualify for that mortgage.
- Max out (or even load up) your current credit cards. There may be a credit report pulled – not a full one, just a refresh – looking for more debt right before closing. If you have increased your credit card balances, it may affect your debt to income ratios and affect your approval.
- Deposit cash into your bank account – we have to document deposits and we can’t document where cash came from.
Always check with your loan officer before making any changes to your employment, debt, credit, bank accounts or anything else that may affect your mortgage. I have had clients tell me they were looking at a new job and I have had to tell them to wait until after closing as it may affect their ability to get the home they want. Once you have closed on your mortgage, you can make changes, but not before!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
