Posts Tagged ‘What NOT to do’

What NOT to do when applying for a Real Estate Loan

June 27, 2012 11 comments

As you start to think about buying a home, you must first get pre-approved before many agents will physically show you properties. Remember, getting pre-approved or pre-qualified is not a guarantee or commitment of getting a loan, and your credit gets checked twice, once when you get pre approved and then again once you are qualifying for a loan, so don’t think you’re on the home stretch after you get pre approved. the biggest mistake people do is make these 7 mistakes in between the time you get pre-approved and the time from actually buying a house:

1. DO NOT change jobs. – Banks enjoy stability so they usually require at least 3 months of employment.

2. DO NOT use your credit cards to rack up debt or let your accounts fall behind. – Banks qualify you based on your ‘debt to income’ ratio, and raising your debt alters how much buying power you have by decreasing your income to debt.

3. DO NOT  buy furniture. – This is the biggest mistake of all! Especially after you have a house under contract and want to start buying furniture for the house. Making big purchases decreasing cash on hand or increases your debt, altering your approval limit.

4. DO NOT spend money you have set aside for closing – you’ve gone this far, make sure you can buy the house once it happens.

 5. DO NOT leave out debts or liabilities from your loan application. – Has anybody told you not to lie? It’s called mortgage fraud… not fun.

6.  DO NOT buy a car. – Big purchases will alter either your cash on hand or your debt, depending if you get a loan, and will affect your income.

7. DO NOT co-sign a loan for anyone – this will show up on your credit report as more debt and alter how much banks can loan you.

I hope this helps! If you have more questions about getting pre approved or finding an Accredited Buyer Agent such as me, contact me anytime.