Shelia Asks… Im getting ready to buy a home. How can I best be prepared?

 

If you follow these tips you should be ensured your home purchase goes smoothly.

Banks and lenders are getting very cautious about home mortgage loans these days — right up to the closing date. Even consumers with good credit and down payment may find themselves in a challenging position if any of these loan application issues become a last minute problem for qualification.

To make sure you are on target for a successful closing, head the following advice…

Avoid any major purchases before closing your mortgage loan.

Some homebuyers think that just because they have applied for the mortgage and signed the preliminary paperwork, the deal is complete.  Don’t be so sure. Lenders have been known to decline mortgage applications when the homebuyer buys a new car or makes another major purchase. Lenders view such purchases as additional debt for the homebuyer and more risk for the banks. Avoid any big-ticket items until after you’ve signed on the dotted line, and your loan is in place and the keys are in your hand! Consider waiting on purchases that you can pay cash for as well – lenders review your cash reserves right up to the day of closing!  

Don’t make any big career changes.

Lenders also weigh your current employment and salary when evaluating your loan application. Any major career move during the process of your application could jeopardize your home mortgage loan. At worst, the lender could decline the loan. At best, the lender could delay the process until you demonstrate your new job is a stable one that guarantees you’ll have the financial resources to pay off your mortgage debt. That’s especially true if you change industries. Communicate with your mortgage professional for advice – BEFORE you make a move!

Controlling Closing Costs & Rates

Watch out for closing-cost surprises… bottom line though, if you work with a reputable mortgage professional there won’t be surprises! Get everything in writing and confirm the rate you were promised is locked and guaranteed through the anticipated closing date.  If you do not get satisfaction – find another lender. Closing costs can be as much as 3% of the cost of a new home — that’s $6,000 for a $200,000 property. Make sure you plan and budget accordingly.

Prepare for a last-minute credit check.

With new rules initiated by Fannie Mae’s loan quality initiative, banks and lenders will likely make a second credit check a few days before closing. So if you miss any credit-card payments or are late on a mortgage payment between the time you were approved for a mortgage and the actual closing date, you may be putting your new home purchase in jeopardy. Even applying for a new credit card can trigger a credit-score inquiry, which could reduce your credit score and threaten your home loan.

Meet Cheryl!

About Cheryl

As a successful business owner and community leader, Cheryl Braunschweiger is known and respected for getting things done with a degree of skill and enthusiasm that bring out the best in those around her - colleagues, clients and friends. The name of her business, ALMC Mortgage, reflects Cheryl's philosophy and personality. She says it stands for All Loans Must Close –a reflection of her determination to do whatever it takes to serve her clients. Cheryl has been in the mortgage lending business for 20 years. Read More About Cheryl
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