Seven Pitfalls to Stay Away From When Purchasing a Home

For the majority of us, a mortgage loan is necessary. Obtaining a mortgage can be challenging. There are many mistakes and pitfalls people make before buying a home.

Once the lender has started the procedure for approving your loan. Your application is what the mortgage company relies on to approve or deny a mortgage. If you take any of the following actions before the closing date, it may result in a significant delay or perhaps be denied the ability to obtain a mortgage altogether.

#1: Get a car:

A car is a significant expenditure that might raise your debt to income ratio. Lenders use this ratio to estimate how much of a mortgage you can afford. Eventually, buying a car may make it more difficult for you to afford a house. Wait until you move in to buy that shiny convertible.

#2: Money transfer between accounts

The lender will require statements from all of your accounts with liquid assets in order to determine whether you qualify for a loan. If you transfer money between them, especially in significant sums, they will notice withdrawals and deposits in several accounts. In order to avoid any red flags, it is recommended to leave assets, such as money for the down payment and closing costs, where they are throughout this procedure.

#3: Changing banks

This also includes money transfers between accounts. You and your lender will have to complete more paperwork as a result. Keep your current bank account open while you wait for the mortgage to be approved. Both you and the lender will benefit mutually at the end. 

#4: Switch Jobs

Your mortgage approval could be impacted by changing employment. Before approving you for a loan, lenders will often want at least two years of employment. Wait till you have funding for your home purchase before starting your own business.

#5: Apply for a credit card or cancel one

A query into your credit score won't have an impact on your credit if you have good credit. However, if you want to buy a house, the lender might be concerned about your financial stability.

#6: Purchase the furniture before getting the house! 

When purchasing a home, furniture is a must, but a significant rise in your credit limit could raise suspicions. It's best to hold off on purchasing a new sofa set until the home purchase is finalized.

Avoid making any purchases that can give the impression that your finances are out of order.

#7: Never give up

Since buying a home is such a significant investment, the process will undoubtedly be both thrilling and stressful. You may be tempted to give up and leave because of all the stress you are under. You should be aware, though, that there is light at the end of the tunnel. You will succeed as long as you cooperate with your lender and follow the procedures with your real estate agent to finally close on your new home.

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Our commitment as your real estate professional is to help you find your dream home at the right timing for you.

It's the biggest purchase of your life, and can assure you that even small mistakes can be costly.  BEWARE, technology changes almost daily and I can help you pinpoint all the homes for sale near your location points. I have access to over 18 million properties from hundreds of locations, including Government  properties, action homes, VA homes, HUD Properties and all available private houses for sale in between.

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Fernando Herboso Broker 301-246-0001