If you are in the process of financing a new home, you could unknowingly sabotage your chances of a successful closing. You have to be careful not to do anything that will affect your credit while going through the process of closing on your home. Here are the 4 top things that could ruin the closing of your home:
1. Making a major purchase could derail your chance of a successful close. People often don’t realize that if they make a major purchase on a credit card, it will likely impact their credit score negatively. If you’ve been pre-qualified for a loan, don’t make major purchases until you have the keys to your new home in your hand. Many people make the mistake of thinking a pre-qualification is a guarantee. There is no guarantee until the loan actually goes through.
The reason a major purchase negatively impacts your credit score is that loan companies use your debt-to-income ratio to determine your ability to pay on a loan. They look at how much gross income you have and compare it to your monthly debt. A major purchase will, at the very least, lower the amount of money a loan company is willing to loan to you. If you are trying to purchase a home that is at the top end of your price range, losing the ability to purchase the home is a real possibility.
2. Keep your job. A career change is another surefire way to put your loan in jeopardy. Loan companies look at how stable your work situation is. They are hesitant to give loans to people starting new jobs because they are aware that most jobs have a probationary period during which you can easily be terminated for almost any reason. It’s best to wait until after the loan has gone through to switch jobs, even if the new job pays more.
3. Beware the last minute credit check. Loan companies are smart. There are often long periods of time between when they pre-approve a person for a loan and when the person actually attempts to get the loan. A lot can happen in this time frame. A person’s credit can go from pristine to less than stellar in a short period of time. This is why loan companies run a last minute credit check. If this credit check differs from the original and shows late payments or defaults, there is a good chance the loan will be denied.
4. Make sure you have sufficient funds to pay both closing costs and the down payment. Nothing will derail a loan faster than a person who doesn’t have the funds to cover closing costs and the required down payment. Don’t commit to pay more than you can afford on the hope that you can scrape the money together before closing. Make sure you know exactly how much you need to have in your account and transfer it to the correct account prior to writing any checks. If you can’t come up with the down payment or closing costs, the loan will not go through. Be honest with your agent and yourself when it comes to how much you have to put towards the closing costs. A loan that doesn’t go through because you can’t afford closing costs can result in you losing your dream home.Immobilienmakler Heidelberg Makler Heidelberg
Source by Kathy Mann Pilcek