When you are thinking about buying a home there are many things you do. Typically you start your search online and then you may drive by the areas you are interested in. Then you go to an open house or two. Eventually you meet a realtor and start looking at homes. In the beginning of the home buying process you meet with a mortgage broker or a local bank. These are the things you should do, but rarely does anyone tell you what you shouldn’t be doing.
These are the 10 things the mortgage broker I recommend to my buyers tells everyone she meets when they are starting their home buying search.
1. Thou shalt not change jobs, become self-employed or quit your job.
Even if you hate your boss or your commute is killing you stay put until after you close on your house. Mortgage companies will not give a mortgage to someone who has just taken a new job even if it pays more than your current one. Stability is the name of the game when buying a home.
2. Thou shalt not buy a car, truck or van (or you may be living in it)!
Those deals can be tempting with great financing but the more payments you have and the higher they are can effect your credit score.
3. Thou shalt not use credit cards excessively or let current accounts fall behind.
If you have been waiting for that special TV to go on sale or you need new clothes for work don’t do it. It is important to keep your debt to income ratio as low as possible.
4. Thou shalt not spend money you have set aside for closing.
You need all the cash you have to close the loan. If you have signed a Purchase and Sale that states you are putting 10 percent down make sure you calculate that amount and put it aside and don’t touch it until you close. Your mortgage broker should be able to give you a preliminary closing statement that will give you a good idea of the amount you will need to bring to the closing. There are other items that you are responsible for such as half of the Maine State Transfer Tax.
5. Thou shalt not omit debts or liabilities from your application.
When your mortgage company pulls your credit all the debts you owe will be on that report so in order to save time and aggravation just put down everything you owe on your initial application.
6. Thou shalt not buy furniture.
Again you will need all the money you have for the closing and that couch or TV will still be there after you close on your house.
7. Thou shalt not originate any inquiries into your credit.
Don’t let anyone check your credit even if you wait until after you close to take out a car loan. If someone checks your credit it will show up and can even effect your score in a negative way.
8. Thou shalt not make large deposits without checking with your loan officer.
Don’t do anything with your money without checking with your loan officer. They can tell you right away if it is going to effect your loan in a negative way.
9. Thou shalt not change bank accounts.
Keep everything the same as when you made your first application. Any changes could effect your credit score or the amount you qualify for the loan.
10. Thou shalt not co-sign a loan for anyone.
You may think it is no big deal to sign for a relative thinking they will be paying the loan but they are using you and your credit to qualify and you won`t be able to qualify for your own loan.
Carrie Colby is the owner/broker of Premier Properties in Raymond, Maine.