KNIEPER REAL ESTATE
Pam Knieper, Broker/Owner of Knieper Real Estate, is and has been the premier producer for over 15 years in Hood County and running. She is known as the waterfront expert and real estate authority.
Early in my real estate career, I saw a lender literally withdraw their loan approval while the buyer signed the closing documents. A few days before closing, this buyer bought a new boat and financed it. When the lender did a last minute check for any changes to his credit, he discovered this new loan. The payment for this new boat was high enough to cause his ratios to plummet and he no longer qualified for the home loan. He got the boat, but not the lake house where he intended to dock it. That’s when I learned a powerful lesson about educating buyers about things to avoid after applying for a home loan.
Once you’ve applied for a mortgage, here are some key things to keep in mind.
– Do not make large purchases: Any large purchase will be a red flag. People with new debt have higher debt ratios. Since higher ratios make loans riskier, borrowers may no longer qualify for their mortgage. Resist the temptation to make major purchases, even for furniture or appliances and especially not boats… LOL
– Do not deposit large sums of money: lenders need to find your money, and the money is not easily traceable. Before depositing any money into your accounts, discuss the proper way to document your transactions with your loan officer.
– Don’t co-sign loans for anyone: When you co-sign a loan, you make yourself responsible for repaying that loan, which means a higher debt-to-income ratio. Even if you promise that you won’t be the one making the payments, your lender will count the payments against you.
– Don’t switch bank accounts: Lenders need to find and track your assets. This task is much easier when there is consistency between your accounts. Before transferring money, talk to your loan officer.
– Don’t ask for new credit: it doesn’t matter if it’s a new credit card or a new car. When your credit report is managed by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will impact your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval.
– Don’t close any accounts: Many buyers believe that having less available credit makes them less risky and more likely to be approved. It’s not true. A major component of your score is the length and depth of your credit history (as opposed to just your payment history) and your total credit usage as a percentage of available credit. Closing accounts negatively impacts both of these aspects of your score.
– Conclusion: If you want your home purchase to go as smoothly as possible, remember to check with your lender before making major purchases, moving your money, or making major life changes, because a bad financial decision could cost you your dream. residence.
If you have any questions about today’s topic or real estate matters, we’d love to hear from you. Please feel free to call us at 817-219-0456 or contact us online at www.WeSellGranbury.com
Portions of this article are sourced, with permission, from www,KeepingCurrentMatters.com
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