Buying a house can be exciting! But don’t get too excited….. Here are a few financial blunders to avoid before you buy your next house.
Don’t change jobs or quit your job! Even after you have received your “pre-approval,” stay on the job! A new job may involve a probation period, and income during that period will not be counted as income towards qualifying for a loan. If you do change jobs, DO NOT change industries, if you can possibly help it! Lenders will look for a stable two-year history in the same industry. And if you do have to change jobs, DO NOT change from a salaried position to self-employed. Lenders want to see a stable two-year history for those who are self-employed.- Don’t talk to any real estate agents at new construction sites! Let us introduce you to the new construction agents. In a strange quirk with new construction companies, they think if your agent isn’t with you on your first visit, then you don’t get to use an agent. Huh? Make sure you have an agent! We will save you $$$$.
- Don’t buy (or lease) a car! We know, that 3rd car garage needs a new car, but wait until you close on your home. Your lender will look carefully at debt-to income ratios, and a large car payment or lease can greatly impact those ratios and prevent a buyer from qualifying. Recent debt counts even more against your credit score.
- Don’t move assets from one bank to a new bank. These will show up as new accounts and will complicate the process, as you must then disclose and document the source of funds for each new account. The lender can verify your current accounts as they stand. You can change/consolidate them later.
- Don’t go buy new furniture or major appliances for your “new house.” These new purchases could disqualify you from obtaining a new loan. Even a no payment/no interest loan will show up on your credit report and could adversely affect your financial position. DON’T buy ANYTHING!
- Don’t run a credit report on yourself or allow anyone else to pull your credit before speaking with your lender. Your lender can advise you on when this should be done.
- Don’t attempt to consolidate debt without speaking to your lender. Companies that help consolidate debt can help reduce your monthly payments, but may actually hurt your credit score. Talk to your lender before making any major financial changes.
- Don’t open any new lines of credit, even if you don’t use them. Any new line of credit can adversely affect your credit situation.
- Don’t pack or ship any important financial information. W2′s, divorce decrees, and tax returns are all important information that can take weeks to get duplicates.
