You will love living by beautiful relaxing White Rock Lake
With mortgage rates at an all time low and prices still affordable, I am seeing a major surge in home buying activity. Surprisingly many of the buyers are first timers in their 20′s and 30′s. Mortgage guidelines have stiffened, but you can still buy a home with decent credit and with FHA you can purchase for as little as 3.5% down.
Here is a list of things not to do while you are in the process of purchasing your home.
1. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not traceable. Small deposits are fine, but getting $10k from your parents as a gift has to be handled in a specific way. Talk to your lender about this before making the large deposit.
2. Don’t make large purchases like a new car or furniture. New debt creates new monthly obligations and can hurt your qualifying ratios for your loan. Wait until after your home purchase to take on new debt.
3. Don’t co-sign any loans for anyone. When you co-sign a loan you are obligated to pay that loan off if the original borrower does not, and the lender will count that payment against you as a debt.
4. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is easier when there is a consistency of accounts. Even before you transfer money from one account to another, check with your lender.
5. Don’t apply for new credit. When you apply for new credit and have your credit checked by anyone, it will affect your FICO score and may determine your interest rate or even your eligibility for approval.
6. Don’t close any credit accounts. Many borrowers erroneously believe that having less available credit makes them less risky and more approvable. Wrong. A major component of your score is your length and depth credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on your score.
7. Don’t share your home inspection with your lender. After your home inspection you will probably negotiate repairs with the seller. The inspection is for your eyes only. If you share the inspection with the lender the underwriter may require that things be done on the inspection prior to closing that you have negotiated a separate solution with the seller on.
8. The lender is not personally picking on you. When your lender asks for items and you provide them, later they are going to ask for more. And then later even more. It is not a personal vendetta against you. They do that to everyone.
9. 95% of the time it is better to use the lender your Realtor recommends. Your Realtor is not recommending a lender because they get any money from the lender. The reason they are recommending someone is because they have had a good experience with that company. Meaning they have competitive rates, excellent service, and close on time. There are many mortgage companies that offer none of these and they do a lot of business, because they offer teaser rates and closing costs that they don’t provide at closing. When you get close to your closing date, you have to take off work, hire movers, set up utilities, pack, change your address, and all the other myriad of things you have to do to move, only to be told a week before closing that the lender will not be ready to fund the loan. That really sucks! I will be happy to provide you with a list of lenders who will treat you and your business with the respect you deserve. Call me at 214-676-4326 or email me at Michael.Schmitt@sbcglobal.net