Financial Blunders That First-Home Buyers Make
Usually, first-time home buyers are surprised to find out that there are so many ways that can mess up a home purchase. If you want to avoid messing up a transaction, you’ll have to be very much careful until the sale has closed.
It’s quite easy for you to make mistakes if you’ve never bought a home before. So, you can use the following tips to avoid home buying mistake.
Before finalizing your mortgage, the lender will look at your credit and if you have any missed payment, then it’ll become difficult for you to get the loan. So, keep your payments current on all your loan accounts (including car loans and credit cards). Also, the lender has the authority to revoke the mortgage commitment.
Lenders always look closely at your employment history, because they want to make sure that you’re capable of making your loan payments or you’re financially stable. You shouldn’t change your job if you’re in the middle of purchasing a home. It’ll make you look less appealing to the lender because changing situations may cause the lender to think that you’re unstable or you don’t have a good income to keep up with the mortgage.
Buying a Car:
One of the common mistakes that home buyers usually make is buying a car while purchasing a home. This is something that you shouldn’t do while buying a home. The feeling of getting a home of your own is amazing, that’s why people start to look for other ways to improve their life such as buying a car.
Your loan approval is always based on the state of your credit and debt load before you buy a car. Adding the debt of your car purchase will make it impossible for you to get a loan for your home.
Buying Furniture or Household Stuff on Credit:
Many homebuyers buy new appliances and furniture for their new home by using their credit card and this is another common mistake that homebuyers usually make. Buying new furniture or even other household items will change the state of your credit and in that case, you may lose the opportunity of getting the loan.
Lying on Your Loan Application:
Lying on a loan application is considered as a fraud and if the lender finds out that he’s been misled in any way, then you’ll probably lose your loan. Even making an honest mistake can cause you various problems if the lender finds out the truth.
So, be careful and provide all the accurate information. Providing wrong information is a big no when applying for a mortgage.
Don’t Let Anyone Make Inquiries into Your Credit:
The company you’re working with will probably make a credit inquiry even if you apply for a credit card or a loan. The mortgage company may assume that you’re trying to take out more debt if it sees that inquiries are being made. You shouldn’t take unnecessary risks when you’re very close to getting your home.
Don’t Be a Co-Signer for Anyone:
If you co-sign a loan, then this means that you are obligating yourself economically. If the lender is unable to get money from anywhere else, it will come looking for you to pay, it doesn’t matter if you’re the primary person on the loan or not.
Shifting Your Finances Around Before Getting the Loan:
The approval is based on the present state of your finances if a lender pre-approves you. Usually, buyers make a mistake of shifting their money around to improve their position. Don’t make any financial changes until you’ve got your mortgage. You’ll be asked for an explanation if your lender sees you moving money to various accounts.
Banking at A New Institution:
Changing banks before getting your loan can ruin everything. Just like the finances and jobs, your banking history and status leads you to get pre-approved. So, changing your bank may lead you to not getting the final approval.
Large Deposits into Your Bank Account:
The lender may begin to analyze the loan and might back out if you make a notable deposit or if you start doing unusual things with your finances before the home purchase because money that appears suddenly in your bank account can make lenders uneasy.
It can be easy to make mistakes when getting a mortgage especially when you are a first-time home buyer. But hopefully, this information will save you from making financial blunders.