The journey to purchasing your first home is less stressful and more exciting when you trust your financial stability to afford one. In addition to finding the right home for you to settle in, you should choose a great mortgage lender like CREFCO to help you along the way. Buying a new home can take a toll if you don’t have the right people on your side. You can’t afford to make any mistakes when looking to make a significant financial decision like buying a home. Amid the excitement and pressure, it’s important to do research and ensure you are qualified for a loan. Below are some of the common mistakes not-so-savvy home buyers make.
Not Working on Your Credit Score
It would be best if you did not assume your credit score would be up to date without following up. Your score may be in jeopardy if it is never updated or accessed by the wrong people. Credit score remains one of the top factors lenders consider before approving a mortgage loan request. Updating and removing any errors on your report is essential if you want to qualify for the loan that you want. There are many free options to check your credit score, or you can opt for a paid site.
Scouting for Homes Without Pre-approval
The real estate market moves quickly. When you find a home you love, you don’t want to wait for financing to make an offer. You want to make an offer as soon as you find it. As you assess different listings for a potential home to buy, ensure you get a pre-approval from various mortgage lenders. The home seller will only take you seriously in your search for a home if you produce pre-approval documents. The documents not only prove your ability to pay bills but also afford the house. A pre-approval letter can be perfect for real estate markets that are competitive.
Making Big Credit Purchases
Running up your existing credit accounts can be as dangerous as closing and opening lines when determining your credit score. It is through proper management of your finances and credit that you’re able to afford the consistent payment of their mortgage loan. Rather than making large purchases on credit, like furniture or a new car, wait until you have closed on your home loan. Then, if possible, wait a few months to observe the toll the mortgage payments take for better management of your budget.
One of the reasons your credit score is used for evaluating your ability to pay back the mortgage loan advanced is to ensure you have job stability. Changing jobs isn’t wrong; however, your lender might feel threatened by the sudden change. It’s possible the change could affect your financial options. It is especially important not to change jobs after being pre-approved for mortgage financing if possible. Most lenders will not settle for anything less than two stable years of employment before approving your request.