So; you’re looking for a home. You’ve been saving up funds for a down payment and even closing costs, are excited to take the next step in your life… BUT WAIT- Some decisions made right before buying a home can actually decrease your buying power! Today we will talk about what you SHOULDN’T do before buying a home.
What you a SHOULDN’T do before buying a home
01. Change careers/Jobs – Even if it’s a good change, lenders will question your financial stability. Try not to dramatically change your hours or employment type either.
02. Make a big purchase – Making large purchases such as a car, boat, etc. will affect how much debt you currently hold, affecting your debt to income ratio. This can delay your home purchase process.
03. Max out a credit card – As much as it may be tempting to go on a shopping spree for furniture and new home decor in your excitement, it will not look good to add debt to your finances; and you’ll be changing your credit.
04. Get another credit card – You shouldn’t open another credit card or increase your spending limit on your current cards. You don’t want to affect your debt to income ratio or make lenders look twice.
When applying for a loan, be as accurate about your finances as possible
05. Stretch the truth – When applying for a loan, be as accurate about your finances as possible. Don’t try and make them look slightly better, and double check you don’t make any mistakes. Otherwise, there will be big issues.
06. Switch banks – Banking history matters! If you switch suddenly, you may affect your ability to get pre approved. Try and stick with your bank for as long as possible when you decide to start home searching.
07. Move money around – Wait until you’ve passed the closing process to make any large deposits, withdrawls, or transfers between your accounts. Otherwise, lenders will have you explain yourself with proof.
Interested in starting the home buying process? Click here to learn more, connect with a Sage & Cedar agent, and take the plunge!
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