Buyer’s Choice Realty blog

You are serious about leaving where you are currently living. You have found a great agent to help you find your ideal home (clearly you will choose an Exclusive Buyer’s Agent to ensure that your best interests are represented!), and now you have to take the important step of applying for and obtaining a loan to finance your purchase. If you break any of the following 11 rules, you can be sure you will not get the house that you love. It’s simple - don’t do any of the following.

• Don’t quit your job. Don’t change jobs. Don’t become self-employed. After you have applied for a loan, any change in your work status will raise a giant red flag with your lender. Stick it out until you have closed on your property and actually have the loan funds.
• Do not buy any vehicles - car, truck, van, motorcycle, boat, etc. Unless you can purchase the aforementioned vehicle with cash and still maintain enough savings/liquidity, you will increase your current debt and lose out on the loan.
• Do not use credit/charge cards excessively. If you must use your credit card(s), pay on time! Late payments will only cause trouble for you.
• Along credit card lines, do not transfer balances between credit cards. Just don’t do it until your loan has cleared.
• You should have money set aside for closing costs. Do not spend this money under any circumstance. Pretend it doesn’t exist so it will be there for you at closing.
• Do not buy furniture. Do not make any large recreational purchase unless you pay cash and still keep enough in your accounts. Do not buy that 42″ 1080p HDTV you have had your eyes on. Resist the temptation until after closing. Then you can get it if you have enough money after all costs relating to the purchase of your new home have been paid.
• On your loan application, be honest about your current debts/liabilities. Leaving them out will not help you. Your lender will not like that because after they pull your credit they will undoubtedly see all your debts anyway.
• Regarding the above, do not originate any inquiries into your credit, except for the express purpose of obtaining approval for a real estate loan. Consult with a credit expert (your loan officer, someone you trust at your bank, etc.) about credit inquiries. Too many inquiries in a period of time will hurt your credit.
• Do not co-sign on a loan for anyone. Your son wants to buy a new car? He has to finance it on his own or he doesn’t get it. Your sister is in a bind? Help her if you can, but do not put your signature on any loans as additional collateral for others. In the short term period between applying for a loan and closing on a house, you must be selfish regarding your money and credit.
• Do not make large deposits without first checking with your loan officer. Self-explanatory. Make sure you have a solid working relationship with a loan officer who will be available to answer your questions.
• Do not change bank accounts. Even if you are unhappy with your current bank, hang on until after closing.

Hopefully these rules will help you as you enter the scary yet exciting process of buying a home, and all that entails.