- Do be sure to keep your credit healthy by keeping up with your debt payments.
- Do gather all of your documentation.
- Don’t make any big purchases or open any new credit cards.
- Don’t change jobs.
As you get ready to purchase your dream home, here are few tips for you to help avoid any issues from popping up while purchasing your home.
DO: Obtain and Organize All Documentation
When you visit your Mortgage Consultant, be prepared with the following documents to get your pre-approval started:
- Recent pay stubs
- W2s from the past 2 years
- Bank statements
- Investment statements
- Proof of any debt
- Driver’s license
- Your Social Security card
Ask your Mortgage Consultant if there is anything else that you might need to bring.
DO: Keep Your Credit Healthy
Make all of your payments on time, and most importantly, don’t miss any payments.
Be cautious with your credit cards. Paying off your credit card statement balance each month is very helpful for maintaining or even boosting your credit score. Your credit score will be pulled multiple times over the mortgage process, so you’ll want to maintain your credit throughout the process. The higher your credit score, the greater potential to get a competitive rate or qualify for certain loan programs!
DO: Notify Us of Spending or Income Changes
There are a variety of situations that can happen during this process. Contact your Mortgage Consultant if any of these things happen to you:
- An emergency medical expense
- A new car purchase
- An expensive car purchase
- A job change
- A sudden influx of money (inheritance, tax return, etc.)
A change in your spending or assets could affect your credit score and possibly the entire loan. Contact your Mortgage Consultant if you aren’t sure if something could impact your credit score or loan status.
DO: Be Flexible and Responsive
There are going to be a lot of moving parts in this process, and some may take longer than others. Please be patient and respond quickly if your Mortgage Consultant contacts you for more information or documentation. Your quick response will help move the process forward and get you into your home sooner!
DON’T: Apply for New Credit, Make Large Purchases, or Close any Current Accounts
Remember that your credit score will be pulled multiple times throughout the mortgage process and any significant changes could impact your loan. Try to keep your finances as steady as possible until the process is complete.
DON’T: Co-sign for Anyone
Your debt-to-income ratio is a huge factor in your mortgage application. This ratio measures how much of your gross monthly income (that’s the amount BEFORE taxes) goes toward debts you have to pay. The added debt of co-signing for a friend or family member will make it harder for you to manage bigger monthly payments. While this is not technically your debt to pay, it will show up on your credit check as a debt you agreed to pay and might have to pay if your friend or family member can’t make the payments.
DON’T: Change Jobs
A steady income is one of the biggest factors considered when approving your loan amount, so a job change will start the whole process over again as your new income is considered.
DON’T: Make Undocumented Deposits
An undocumented deposit is one that is outside of your traditional income and will raise questions. Let’s say your best friend paid you back the $1,000 you lent him last month or you got money for a down payment as a gift from your parents. Either of those deposits will appear on your bank statement as an “ATM Deposit” because they are not part of your regular income. You’ll need to prove where that money came from, and that could become difficult as you juggle all the other pieces of the mortgage process.
As you go through the mortgage process, remember to keep an eye on your finances.
When in doubt, your Mortgage Consultant is your best resource for advice. They will be most in tune with your situation and how it relates to your mortgage loan.
Call your local Mortgage Consultant to get started today!