Big Don’ts, If You’re Planning on Buying A Home!
1. Don’t make any major purchases if you’re in the home-buying and loan-qualifying process. This means, weddings, vacations, cars, furniture, electronics or even jewelry. When you go to pre-qualify for a mortgage your debt-to-income ratio is critical. This is the percentage of your gross monthly income before taxes that you spend on debt. This will include housing costs, taxes, insurance, and also any debt that you have on credit cards, car payments, student loans, money owed on installments. You may be able to afford these payments but they all add up to determine the loan amount for which you qualify. You don’t want to have your eye on the property of your dreams and be told by your loan officer, “You shouldn’t have bought the SUV, without it you would have qualified for this house!” Take the vacation or buy the car once the deal is closed.
2. Don’t change jobs unless you have to. Stability is key when it comes to looking good in terms of your qualifying for a loan unless of course you’re moving and buying due to a job transfer. If your job transfer is a promotion and an increase in salary, all the better.
3. Don’t move your investments, change banks or money between accounts. Once your loan officer sends your file to the underwriter, the less of a paper trail that has to be followed by the better. The underwriter meticulously will track every payment, every investment, every charge, and every expenditure. Buying or selling stocks, moving investments between accounts or even moving money between bank accounts, does not create a picture of stability and creates a more precarious situation for your approval.
