Be a Loan Rockstar: 7 Things Not to Do While You're Buying a Home
Getting approved for a home loan is a big step, and the period between applying and closing matters just as much. Lenders keep checking your credit, income, and bank accounts all the way to closing day. Here are seven common mistakes that can delay your loan, change what you qualify for, or cause you not to qualify at all.
1. Don't look at homes before talking with your loan officer
Know your numbers before you fall in love with a house. A pre-approval tells you what you can afford and what your options are, so you can move quickly when you find the right home and avoid surprises after your offer is accepted.
2. Don't buy a new car, boat, trailer, or other big-ticket item
Your lender watches your credit during the entire process, and new purchases show up. A new loan or monthly payment can change what you qualify for, or stop your approval altogether. Wait until after closing.
3. Don't open a new credit card
New credit affects your loan approval. If you truly need to open a new account, talk with your loan officer first.
4. Don't change jobs or quit to start a business
Lenders look for steady, reliable income. Changing jobs in the middle of the loan process can disqualify you. Talk with your loan officer before making any change to your work.
5. Don't max out your credit cards
Try to keep your balances at 30% or less of your credit limits. This helps your credit score and keeps your debt-to-income ratio (how much of your monthly income goes toward debt payments) in a healthy range for qualifying.
6. Don't assume you need 20% down
You don't need a 20% down payment to buy a home. Many loan programs allow much less, and down payment assistance programs can help too. Often it makes more sense to keep some money in savings for your new home than to put it all toward your down payment.
7. Don't change banks or move money around
Lenders need to see two months of bank statements for any money you'll use toward your purchase. Large deposits during that time need a paper trail showing where the money came from. Keep your accounts steady, and ask your loan officer before moving money or depositing anything large.
The bottom line
When in doubt, call your loan officer before you make any financial change. A quick conversation can save your approval.
Getting ready to buy in Utah or Idaho? Schedule a free strategy call and I'll walk you through every step.
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