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Nine Things to Avoid When Buying a Home

The spring and summer housing marketing has started and we were fortunate that Ted Stiner from Approved Mortgage Corp at 600 E Carmel Drive #268 in Carmel shared Nine Things to AVoid When Buying a Home.

Follow some of these tips to avoid getting declined or having your interest rates rise.

  • Do not quit your job- This includes retiring or becoming self-employed.  You are pre-qualified by your lender based on your job with your current employer and any change to that standing can affect your loan.
  • Do not change banks or bank accounts - You want your bank history to show stability, switching banks or transferring money from one account to another can send the wrong signal to a mortgage loan officer.
  • Do not buy anything you have to finance before buying your home - This includes furniture, appliances, vehicles, or any other form of transportation.  Barring a cash transaction, the financing of any big-ticket items can increase your debt-to-income ration negatively.
  • Do not be late on your credit card payments or charge excessively - Being late on your credit card payments can lower your credit score, which might affect you're standing with your lender.  You need a track record of financial responsibility to show you can manage your money.
  • Do not make large deposits into your bank accounts you cannot explain - Mortgage lenders like your down payment funds to be in your bank account for at least two months.  When money seems to appear out of nowhere, you can run the risk of a lender second-guessing you financial standing.
  • Do not use cash for your earnest money deposit - For your earnest money deposit, use a check to develop a paper trail.  You want to be able to track everything, if need be.  Furthermore, make sure you are issuing your earnest payment to reputable third party.
  • Do not co-sign on a loan for anyone - Even if you are not the one making the payments on the loan, you are responsible party on the loan, and it can increase your debt-to-income ratio.
  • Do not have inquiries into your credit - Looking for new credit translated into higher risk for lenders because it appears you are bringing on more debt.  However, if your inquiries are related to your mortgage search, it usually does not affect your credit score, as the assumption is you are rate shopping.
  • Do not lie on your application - Use common sense.  Things like leaving out your debts or inflating your income will affect your ability to even qualify for a loan, and if you cannot qualify for a loan you will never be able to buy a home.

 
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