If you are thinking about buying a home within the next few months, there are specific mistakes that you should avoid as they may affect your ability to obtain a home loan. Below are Plum Island buyer mistakes to avoid.
Plum Island Buyer Mistakes To Avoid
Lenders review the percentage of your debt to your overall income. Making major purchases either on your credit cards or with new loans can significantly alter that percentage. Usually, the higher your debt, the less you can qualify for on a home loan. This is particularly important after you have found a property and have begun the mortgage process. Lenders will re-check your credit report immediately prior to closing to confirm that nothing has changed. If you gained new debts, this can lead to issues with getting the loan.
As part of the approval process, mortgage companies review your past and current employment to analyze your ability to make payments. Consistency in employment is essential. Moving employment prior to or during the loan process can create difficulties with qualifying for a loan, particularly if the new job is in a separate line of work or provides lower earnings. During the mortgage process, it may also create delays while the new employment is verified.
Mortgage underwriters usually analyze your bank account history over the last several months. Moving your funds to a different institution may cause issues. It is recommended that you leave money in the same account until the closing completes.
Most types of mortgages require that you use a certain percentage of your own funds for the down payment or closing fees. Banks confirm this by reviewing bank statements. Any cash transactions are closely scrutinized. You may be asked to provide details on the source of cash deposits.
Shutting Down Accounts
While preparing to purchase a home, you may try to diligently pay off debts. Before starting this, think about speaking with a mortgage professional on whether it is necessary given your financial situation. If you do pay off bills, do not terminate the accounts as this will affect your credit score. It is better to keep the accounts open with no balance.
More Advice on Plum Island Buyer Mistakes To Avoid
The above Plum Island buyer mistakes to avoid covers only the most common mistakes. As a local real estate professional, I can refer you to local lenders in the Plum Island area. You may reach me, John Wells, at Wellsco Realty via phone at 978-518-1481 or email at firstname.lastname@example.org.