5 Things To Avoid Before Purchasing Real Estate

If you are planning to buy a home within the next few months, there are specific mistakes that you should avoid as they may hinder your mortgage options. Below are 5 things to avoid before purchasing real estate.

Major Purchases

Lenders evaluate the percentage of your debt to your overall income. Increasing balances either on your credit cards or with new loans may significantly change that percentage. In general, the more debt you have, the less you can qualify for on a mortgage. This is even more important after you have found a home and have started the mortgage process. Mortgage companies may re-run your credit report immediately before closing to verify that things have not changed. If you took on new debts, this can lead to problems with getting the mortgage.

Switching Employment

As part of the loan process, lenders look at your previous and current employment to evaluate your ability to pay back the loan. A consistent history in earnings is essential. Changing jobs before or during the loan process can cause issues with qualifying for a loan, particularly if the new job is in a different field or at a lower rate of pay. During the loan process, it will also create delays while the new employment is verified.

Changing Banks

Mortgage processors typically analyze your bank account history over the last several months. Moving your money to a different bank may cause problems. It is advisable to keep funds in the same location until after the closing.

Cash Transactions

Many types of loans require that you use a specific amount of your own funds for the down payment or closing costs. Banks verify this by reviewing bank statements. Any cash transactions are closely scrutinized. You may be asked to provide details on the source of cash deposits.

Closing Accounts

While preparing to buy a home, you may try to pay down credit cards. Before doing this, consider consulting with a mortgage consultant on whether it is needed given your financial situation. If you do pay off bills, do not terminate the accounts as this will reduce your credit score. It is better to keep the accounts up with no balance.

More Guidance on 5 Things To Avoid Before Purchasing Real Estate In

The above 5 things to avoid before purchasing real estate in covers only the most common mistakes common ones. As a local real estate professional, I can provide you with a list of local lenders in . You may reach me, Gregory Diaz and Gina Guerriero, at S.I. Premiere Properties via phone at 718-408-1499 or email at gregdsells@aol.com.