Maybe the first post of the year should be pretty straightforward and to the point. Things you should really consider when trying to qualify for a new home loan or refinance.
Let’s start with DONT’S! 1) DO NOT make major purchases on a car, boat, furniture, jewelry, etc., just before you decide you want a new home! For some strange reason in my 35s, it’s mind-boggling that 70% of people finance a car within 6 months of trying to buy a home. This car payment could impact your ability to qualify for the home of your dreams! Buy the HOUSE first, then buy the CAR! 2) DO NOT ADD ANY NEW CREDIT! Opening new credit cards will immediately lower your FICO score. 3) DO NOT move money or transfer bank balances (except between linked accounts) unless you first discuss the impact of this transaction with a loan officer. 4) DO NOT deposit MONEY into accounts within 2 months of buying a home! Since you cannot prove cash, lenders do not allow it. 5) DO NOT refund ANY collection or charge! I know this sounds crazy, but it will hurt YOUR CREDIT POINTS in the short term! 6) DO NOT close any credit card, especially if you have had this card for a long time (5 years or more)! 7) DO NOT overload your credit limit! This will seriously affect your credit scores! 8) DO NOT CONsolidate ANY DEBT! 9) If you are going to receive a GIFT from a parent, DO NOT ask that parent to offer you the money until you have spoken to your loan professional first! It’s a big ! It is best to have the parent STILL DIRECTLY PAID THESE FUNDS at the close of the transaction.
Now for the DO’s! 1) If you’re refinancing, keep making all of your mortgage payments, EVEN if your loan officer tells you not to (because if the deal is late and it’s past the 30th of the month, YOU reap the 30 days late on your credit report!) 2) Keep working! And for the same employer! In other words, don’t quit your job to start a new one unless you discuss it with your mortgage advisor! 3) Continue to live at your same address. Getting around during an escrow can be a real headache for your lender! 4) Continue to make ALL your payments on time to all creditors. A single slip during an escrow can cause serious damage; even prevent you from buying or refinancing.
For questions about dos and don’ts, call your loan professional, Curt Kravitz, at 661-705-2500! Can’t wait for an excellent NEW YEAR 2022!