The Pre-approval Dont's
Getting pre-approved is step one in the home buying process. Here are 6 things to steer clear of when seeking to obtain financing for a home:
1. DON'T Buy or Lease a Car Before You Apply for a Home Loan:
A large payment such as a car lease or purchase may make you look good in person but won't help you look good on paper to a lender. Lenders look carefully at your debt-to-income ratio, and a new car (or any large purchase) can greatly impact those ratios and prevent you from qualifying for a home loan.
2. DON'T Move Assets From One Bank Account to Another:
These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.
3. DON'T Change Jobs:
Sometimes this is unavoidable, but do not make any voluntary job changes when seeking financing. A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.
4. DON'T Buy New Furniture or Major Appliances for Your New Home:
If the new purchases increase the amount of debt you are responsible for, there is the possibility this may disqualify you from getting the loan or cut down on the available funds you need to meet the closing costs.
5. DON'T Runs a Credit Report on Yourself:
This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.
6. DON'T Attempt to Consolidate Bills Before Speaking With Your Lender:
The lender can advise you if this needs to be done, and if so how to properly do so.
1. DON'T Buy or Lease a Car Before You Apply for a Home Loan:
A large payment such as a car lease or purchase may make you look good in person but won't help you look good on paper to a lender. Lenders look carefully at your debt-to-income ratio, and a new car (or any large purchase) can greatly impact those ratios and prevent you from qualifying for a home loan.
2. DON'T Move Assets From One Bank Account to Another:
These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.
3. DON'T Change Jobs:
Sometimes this is unavoidable, but do not make any voluntary job changes when seeking financing. A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.
4. DON'T Buy New Furniture or Major Appliances for Your New Home:
If the new purchases increase the amount of debt you are responsible for, there is the possibility this may disqualify you from getting the loan or cut down on the available funds you need to meet the closing costs.
5. DON'T Runs a Credit Report on Yourself:
This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.
6. DON'T Attempt to Consolidate Bills Before Speaking With Your Lender:
The lender can advise you if this needs to be done, and if so how to properly do so.
