Do & Don’t when buying a house

Yes, there are “Do & Don’t” rules (aren’t there always) to follow when buying a house. Just think, you get that accepted offer on your dream home and are looking forward to moving in! Following the rules means you make it to the closing table. If you don’t follow them, you are jeopardizing the deal.

The “Pending” Process

After your offer is accepted, it typically takes 30 to 40 days before you will close on the purchase of your new home. During this time, you need to keep things squeaky clean! Your lender will pull credit, verify employment, need bank statements, need tax returns, etc…

Any changes to these or other areas can cause you to not qualify for your loan anymore meaning, you could lose your dream home! 🙁

It’s really a short period of time that ends with a new home! You can do this!!!

Let’s take a look at the rules:

Remember, this is a guideline. Always check with your lender. They are the professionals who can counsel you on the details of applying for and getting approved your home mortgage.

Do’s

#1 – Stay current on all your existing accounts/bills.

This is not the time to pay anything late! Late payments can adversely affect your credit score DURING the pending loan process.

#2 – Continue to use credit as you normally do.

Again, red flags can be raised if your spending changes during the pending process. Just do your normal routine with spending and paying bills.

#3 – Talk things over with your loan officer.

If you are planning to get gift funds for a down payment or earnest money deposit, talk to your lender. The more upfront you are with him/her the better your chances of avoiding problems!

#4 – Be ready to get your lender any documents they ask for, quickly!

Time is of the essence in real estate. Be ready, willing and able to get them what they need. Your final loan approval depends on it!

Likewise, here are the “Don’t Do” items list you should adhere to when buying a house.

Don’t Do’s

#1 – Don’t change jobs

A change in employment can totally mess up a mortgage loan. Lenders want to see 2+ years at the same job. It shows stability and reliability. Even if it’s a better paying job, you need a history to show the lender and this could adversely affect your getting the loan.

#2 – Don’t apply for new credit of any kind!

When you apply for credit, loan or credit card, the company pulls your credit score and that can actually lower your credit score. Wait until after closing before you apply for credit anywhere!

#3 – Don’t make any major purchases or even any new purchases

Don’t buy a car, boat, appliances, or even furniture when you are in the pending process of a mortgage loan. The credit pull will affect your credit score AND a change to your debt to income ratio can mean you no longer qualify to buy your dream home! Better safe than sorry! Buy furniture and such after closing!

#4 – Don’t Close Any Credit Accounts without Checking with Your Lender, First

Believe it or not, closing an account can lower your credit score. Check with your lender before you do this!

#5 – Don’t Co-Sign on any loans for anyone

Hold off during the pending process. Co-signing a loan for someone else will make that loan amount count against your debt to income ratio and could mean you won’t qualify to purchase!

#6 – Don’t make any large deposits that cannot be traced

It’s best to not make any unusual, large deposits into your bank accounts, period. Deposits that cannot be traced to an original source will raise red flags with the underwriting department.

We are Here for You!

Remember, we’re here to help you through the process. Together with your lender, we’ll keep you on the straight and narrow and get your into your dream home. If you ever have any questions, come to us!

Choosing your Realtor and Lender are the two first steps to buying a home. Then, we’ll help you find just the right one!