Twelve Important Things Buyers Should Not Do When Trying to Purchase A Home

There are many things buyers should be aware of so they do not jeopardize the safe and timely close of their mortgage loans.  The "don't do" list includes things that can adversly impact credit scores, and ultimately loan approval.  Credit scores are used to assist in mortgage credit decisions including:  loan approval, loan pricing, and loan product availablity. Buyers should never do any of the following between the initial loan application and the close of escrow.

1)  Don't forget to make payments on any of your present loans, credit cards, and monthly bills.  This may seem all too obvious, but there's a lot going on once you start the homebuying process and with the rush of events, you can forget to make a payment. Keep organized, and have a system to get bills paid on time.  Credit reports typically have a normal 120 day shelf life, and with today's homebuying process taking longer, it is quite likely that an updated report will be necessary before closing on a house.  If a late payment shows up, this can put the loan, and escrow closing in jeopardy.

2)  Don't fail to inform your loan agent of any changes to the real estate transaction.  Last minute changes such as revisions to the purchase contract, or required termite or repairs can create havoc with closing dates.

3)  Don't quit or change your job. Lenders are likely to call your employer just before the loan records to verify you're still working at your present job.  If you aren't, the lender will stop the loan from recording.

4)  Don't leave town without leaving a contact phone number with your agent and loan agent until all loan approval conditions are met.  You may need to provide additional documentation.

5)  Don't consolidate credit card debt from several cards to one.  A new card with one balance at the limit can result in a lower credit score than three cards, each with balances below the limit.

6)  Don't move money allocated for the down payment from one account to another.  This creates confusion.  If you intend to move funds, advise the lender in advance and keep a detailed paper trail.

7)  Don't sell stock for the down payment without keeping a record of the liquidation.  Same reasoning as 6) above.

8)  Don't loan money to family, or firends, even if it's short term.

9)  Don't incur any new debt.  This increases your debt-to income ratio, potentially reducing the amount that you can borrow.  It can also lower your credit score because new debt has a negative impact on credit scores.

10) Don't even go shopping for a car, not to mention, don't buy one!  If you give your social security number to the salesman, it enables the dealer to check your credit.  Each credit inquiry lowers your credit score even if you do not buy a car.

11) Don't respond to "you are approved for a credit card" solicitation. Just as in 10) above, a credit inquiry will result, and could have the same impact.

12)  Last, but not least, don't be in the midst of divorce proceedings.  Most lenders will not make a mortgage loan until the final decree,  and settlement terms are recorded.

Pay close attention to this list, and more than likely your loan processing will go smoothly.

If I can answer any questions, or assist you in your home-buying process, please contact me at 951-254-4305, or email me: Janet@janetkleen.com.

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