So, you’re ready to stop paying rent and finally achieve your American dream. The only thing stopping you is you — or, more specifically, your financial habits.
If buying a home is on your radar, your finances need to be top of mind in all you do.
Want to make sure you’re on the right track to apply and get approved for a mortgage loan? Then avoid these major financial faux pas in the lead-up to your application:
Having a poor credit score — or none at all. If your credit score is lacking, start paying off debts and be sure to make all of your payment deadlines. If you don’t have a credit history, most financial experts suggest opening up a credit card and committing to paying it off in full every month. Wait a while before applying for a mortgage so you can build up your score.
Creating new debt. Don’t buy a new car, co-sign a loan for others or open up new credit cards just before applying, or at any time during the home buying process. Not only will you have more financial obligations, but they could also hurt your credit score.
Switching jobs. Now is not the time to forge a new career path. Lenders will be looking at your employment history as well as your income, so having a steady job is crucial.
Depositing money without records. If you’re putting a big chunk of change into your account, document it. Your lender is going to be scrutinizing anything out of the ordinary in your finances. Make sure you can explain that down payment gift money or sizable bonus from work.
Reach out to start looking for your new home today. Have more questions about your finances first? Get in contact for a lender referral.
Licensed Broker Associate