Rules to Help You Own a Home

Eleven Rules To Make it to the Finish Line:  512-431-5223

       Continue making your mortgage or rent payments

Remember, you’re trying to buy or refinance your home – one of the first things a lender looks for is responsible payment patterns on your current housing situation.

Even if you plan on closing in the middle of the month, or if you’ve already given notice, continue paying that rent until you’ve signed your final loan documents.

It’s always better to be safe than sorry.

 Stay current on all accounts

The same goes for your other types of accounts (student loans, credit cards, etc).

Nothing can derail a loan approval faster than a late payment coming in the middle of the loan process.

 STOP NO  major purchases (car, boat, big-screen TV, etc…)

This one gets borrowers in trouble more than any other rule.

A simple tip: wait until the loan is closed before buying that new car, boat, or TV.

  STOP NO new furniture until you close on your home

This often bites the first time buyer.  Remember, you’ll have plenty of time to decorate your new home (or spend on your line of credit) AFTER the loan closes.

   STOP NO new credit cards

Opening a new credit card dings your credit by adding an additional inquiry to your score, and it may change the mix of credit types within your report (i.e. credit cards, student loans, etc).

Both of these can have a negative impact on your score, and could result in a denial or a delay if the underwriter feels they need to re approve your loan

     STOP leave your current credit card accounts alone

The reverse of the previous item is also true. Closing accounts can have a negative impact on your score (for one – it decreases your capacity which accounts for a significantly influences your credit score).

    STOP NO new cell phones

Cell phone companies pull your credit when you open a new account. If you’re on the border credit-wise, that inquiry could drop your score enough to impact your rate or cause a denial.

    STOP NO balance transfers or consolidating accounts onto 1 or 2 cards

We’ve already established that additional credit inquiries will hurt your score, but consolidating your credit will also diminish your capacity (the amount of credit you have available), resulting in another reduction of your credit score.

  STOP DO NOT pay off collections

Sometimes a lender will require you to pay of a collection prior to closing your loan; other times they will not.

The best rule of thumb is to only pay off collections if absolutely necessary to ensure a loan approval. Otherwise, needlessly paying off collections could have a negative impact on your score.

Consult  Jan prior to paying off any accounts.

   STOP NO new loans

This goes for car loans, student loans, additional credit cards, lines of credit, and any other type of loan.

Taking out a new loan can have a negative impact on your credit, but also looks bad to underwriters.

   STOP NO job changes

Changing a job can cause a shift in how an underwriter looks at your income and delay your closing awaiting a current paycheck.

Let Jan know if you are thinking of making a change in where you work.

 

Just remember the simple tip: wait until AFTER the loan closes for any major purchases, loans, consolidations, and new accounts.

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