In order to make your home sale go smoother, there are several things you should avoid when you buy a St. Louis or St. Charles area home. Most of the hurdles to clear regard mortgage financing. Even though you may be pre-approved for a mortgage loan, it does not mean the lender has legally committed to funding the loan. Buyers who don’t know any better can inadvertently add obstacles to their mortgage funding between writing a contract and closing day. Here are five things to avoid during the home buying process.
Don’t Run Up Your Credit
Don’t max out your credit cards buying furniture for your new home. Wait until you close. This also goes for any other large purchases like a car, boat or vacation. Don’t open up new credit accounts. If you absolutely need to obtain new credit or accrue debt before closing, talk with your loan officer as soon as possible. New payments will affect your monthly debt-to-income ratio in a negative way. Here are ways to improve your credit.
Don’t Switch Up Your Banking
Don’t switch financial institutions right before or during the home buying process or make a lot of unusual deposits or withdrawals. Your mortgage lender will be double checking your finances and require clear documentation and a recognizable paper trail of your finances. Money that will be your down payment should be sitting in your account for at least two months - what lenders call "seasoning" - so that the funds don't just appear out of thin air. Also, don’t co-sign anyone else’s loans during this time.
Don’t Get Behind
Make sure you continue to pay your bills on time and don’t get behind. Payment history comprises about a third of your credit score. A single 30-day late payment can chop 60 to 110 points from your credit score. Many lenders require at least 12 consecutive months of on-time payments in order to qualify for a home loan.
“It is very important that the borrowers communicate with their loan officer if anything changes financially from the time they start the house hunting process to the time of closing. Most times the loan officer will find out if something does change and if that happens at the last minute, your closing could be delayed. In most cases if something does change and you alert your loan officer to help fix the issue, closing will go on as planned.” - Jeff Griege, VP, Paramount Mortgage
Don’t Change Employment
Obviously lenders want you to have steady employment in order to grant you a mortgage loan. So don’t change jobs before applying for a home loan. It’s also not the right time to become self-employed or quit your job. If there are any changes in your employment, notify your lender. You don’t want to spend money on the home buying process if you won’t get the loan in the end.
Don’t Spend Your Savings
Part of the price of financing a mortgage loan is the closing costs and you’ll likely have some responsibility for paying them. Make sure you have enough for your share of the obligation. Get an idea of the price of your closing costs in advance by talking to your lender.
The Boehmer Team Knows How To Close
The Boehmer Team understands many of the hurdles homebuyers face in procuring the St. Louis or St. Charles, Missouri home of their dreams. We face any obstacles with our clients and do our best create a clearer path to home ownership. If you have questions about the home buying process contact The Boehmer Team.