first time home buyer

Read below to learn what situations to avoid that could impact your loan:

  1. Don’t change jobs, become self-employed /commissioned or quit your job

    Paystubs are needed covering a 30-day period at your present job. If you leave a salaried job and become self-employed/commissioned, you would typically have to wait 2 years. Employment verifications are done within 5 days of closing.

  2. Don’t co-sign a loan for anyone

    Any changes to your credit report or status could negatively affect your ability to close your loan. Co-signing any type of car loan, student loans or other loans will result in inquiries to your credit and additional financial obligations.

  3. Don’t buy a vehicle

    Applying for credit to purchase a vehicle will result in an inquiry to your credit report. This will decrease your score,
    decrease the amount of money you can qualify to borrow, and make it more expensive to do so.

  4. Don’t use charge cards excessively or make any late payments

    Excessive use of credit cards can have negative effects on your score. Inquiries alone may lower it and balances greater than 1/3 of the available credit limit can also lower your credit rating. Any late payments will lower your score significantly regardless of the amount due.

  5. Don’t spend money you have set aside for closing

    Having enough for down payment and closing costs is critical, but so are reserves after closing. Spending this money
    prior to closing could result in a denial.

  6. Don’t omit debt or liabilities from your loan application

    Be very honest about all of your debt and liabilities early in the loan process. Everything is checked and double checked, so they will likely turn up at some point and could jeopardize your loan.

  7. Don’t buy furniture, appliances or household items before closing

    Large purchases causing deductions in your bank account, inquiries on your credit report or additional debt on your credit cards could cause your closing to be delayed or denied. You must wait until after you close.

  8. Don’t originate any inquiries into your credit

    As mentioned before, multiple inquiries on your report will decrease your score. Credit is always refreshed within 7 days prior to closing, and inquiries will result in more documentation being required which may delay your closing.

  9. Don’t make large deposits without first checking with your Mortgage Consultant

    Abnormal deposits or large deposits other than regular payroll into checking, savings or any financial account must have sources verified and will result in more documentation being required.

  10. Don’t pay off any collection accounts prior to closing without first checking with your Mortgage Consultant

    This will most likely decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it after closing and make sure that you validate that the debt is yours and that the creditor agrees to give you a paid in full or even a letter of deletion.