In my years of experience as a mortgage professional I have just about seen it all. There are so many mistakes you can make when preparing for that new home purchase, and these are so easily preventable. I’ve written before about the Top Ten No’s of Home Buying, however, it is so HIGHLY important that I feel that a refresher course is good right about now. Here are some highlights:
1) Don’t go looking for a home before you apply for a mortgage. Discuss your goals and align your financing to match. I will always want a pre-qualification letter anyway. Why look at something that you can’t qualify for?
2) Don’t settle for a pre-qualification letter. It is written by the loan officer, and based upon information you may have only provided but not documented. It is better to get PRE-APPROVED. The loan will have been reviewed by an underwriter and can be approved subject to property and appraisal conditions. Highly important also when and if you get into a multiple offer situation!
3) Don’t pay off collection accounts just before you apply. Have your credit pulled and reviewed by a mortgage expert. By paying off any old collection accounts, you will have inadvertently made the collection appear as a current event and make your score worse.
4) Don’t tell your loan officer an untruth. Not only can you put yourself in legal trouble, but the loan originator could be hung out to dry. Honesty is always the best policy, and invariably, won’t fly. We have solutions to most problems.
5) Don’t close at the end of the month. It seems like every Real Estate contract is written to close at the end of the month, for no good reason. It is actually the worst time to close. The closing department of the lender, the title company closing the loan, and the banks funding the transaction are all over burdened with volume. I recently had a closing delayed due to the lenders being ‘overwhelmed’ at the end of the month.
6) Lock your rate for a long period and stop looking at the market. The times are changing and market rates can change dramatically, but not usually to the extent that will jeopardize your approval. Just in case… lock it!
7) Don’t change your finances while you apply for a mortgage. Home buyers get the itch to buy things in which to fill up their upcoming new home. Adding additional debt like a car or even a washer/dryer set or refrigerator can ruin your chances at a dream home, believe me! Have a plan and stick to it. P.S. Cosigning for your kids’ car has caused more problems for credit than I can count. Clunker’s build character.
Contact me for help in navigating this market that we are in, (214) 609-7123 or email at email@example.com