Looking to buy a home in the near future? Listen up! These are the top five money mistakes that can jeopardize your purchase:
Once you have secured financing, do NOT open any new lines of credit. This means no new store credit cards, car loans, or financed purchases of any kind. If your new home needs new furniture, either use cash or wait until 30 days after closing so your debt-to-income ratio does not change. After all, the furniture won’t do you any good if you can’t buy the house to put it in.
Make all your standard monthly payments on time. Just before closing is not the time to be forgetful about that credit card bill you’ve had since college. Keep your credit score impeccable and unchanged in the months before closing, or your loan officer may need to change the terms of your loan at the last minute, costing you delays in the short term and a higher monthly payment in the long run.
Too Many Credit Checks
While checking your own credit, considered a "soft check," will likely not bring your score down, buyers occasionally get too excited about purchases for their new home before closing. Even if you don't open a new line of credit, checking to see if it is an option can lower your score. This is called a "hard check" (performed by a lender) and could adversely affect your ability to secure proper financing for the purchase that matters most: your home. It’s better to play it safe and wait until after closing to start decorating.
Lenders want a significant work history and usually tax returns or pay stubs. If you switch jobs two weeks before closing, those things will be impossible or very difficult to obtain and could delay your close date considerably.
Unsteady, Untraceable Bank Accounts
Lenders need to see where the money in your savings/checking account originated. Pay stubs and deposit slips will reassure them, as will documented gift amounts if family is contributing to your down payment. It’s important to show where the money came from and that it is NOT the result of a loan that needs to be repaid. It’s also important not to transfer large sums in or out of your account just before closing, as those funds will need to be documented, as well.
The good news is that all of these common mistakes are squarely within the buyer’s control. You can avoid ALL of them by speaking openly with your loan officer and your real estate agent, both of whom have a wealth of knowledge to draw from and will work diligently to help you overcome difficulties. Remember, everyone is working toward the same end goal – YOU in your new home. Take control of your finances and sign those closing papers on time!
Peggy Slappey Properties, Inc. is a Metro Atlanta real estate brokerage with more than 35 years of experience in real estate sales and marketing. From new home construction to resales, we can help you find the home of your dreams. To see our current listings, visit www.psponline.com and call us for expert advice at 770-271-5555. Keep up to date with the latest PSP events and offers by checking in on Facebook at https://www.facebook.com/peggyslappeyproperties and on Twitter at https://twitter.com/psponline.