Is 2017 the year you will take the plunge and buy your first home? Or maybe you have been thinking about downsizing. Will this be the year? If so, you should begin to take the financial steps that will make the process just a bit easier. Your ability to buy a home rests on your ability to secure a mortgage. This doesn't mean just obtaining a pre-approval at the beginning of your home shopping adventure. It means maintaining the info you provided to your lender at pre-approval through the final underwriting process, which often happens just several days prior to your closing.
Here are a few helpful tips to keep you on track:
1. Don't Change Jobs
Your ability to repay your mortgage is crucial and that ability comes from the money you make.
If you change jobs after you have signed a purchase contract, you will likely not close on time.
This is because your lender will require at least one paystub from your new job and sometimes
two. They may also require a copy of the offer letter and a verification of employment (both
written and verbal). Word to the wise: Close on your house with your current job.
2. Don't Apply for New Credit
Once you have signed the purchase contract do not apply for any new credit. This includes car
loans, credit cards, cell phones, and utilities. Doing this will likely change your credit score
and as a result your rate lock and/or fees associated with closing on your house. Most lenders
monitor your credit throughout the loan process and they will be notified if you do apply for new
3. Don't Change Your Credit
Not making changes to your credit also includes not closing any accounts or disputing any credit
cards. Doing this could also change your credit score and impede the underwriter's ability to run
automated underwriting which will pause your loan file from moving forward until it is resolved.
4. Don't Move Money Around
Keep the activity in your checking and savings accounts to a minimum. The only deposits during
your loan process should be your direct deposit payroll. If you are being gifted funds from a
family member for closing, they should be wired directly to the closing agent.
5. Don't Start Shopping for Your New Home
Do not schedule your moving company before you have received your final underwriting
approval. Doing so will just cause headaches for everyone if your closing date gets pushed back
even a day. Keeping in line with numbers two and three you should wait until after closing to
start shopping for new furniture and/or appliances. Applying for new credit or removing a large
sum from your bank account will be problematic.
If you follow these tips after you sign your purchase contract, you will experience a stress free process. If you have any questions, please don't hesitate to send me an email. If you are ready to start the process of buying a home, I would love to talk with you. I can also refer you to a great loan officer!