When you are preparing to buy a house it’s important to make sure your finances are in order and well-documented. There are a number of things you should avoid doing financially as you prepare to seek a loan approval, and some of them might surprise you. Even after you have been pre-approved you should be cautious to make sure that nothing disrupts your final closing. Here are five things you should not do to ensure a smooth loan process.
Don’t Apply For New Credit
Changes in credit can cause delays, change the terms of your financing, or even prevent closing. If you must open a new account (or even borrow against retirement funds) consult your Loan Officer first.
Don’t Change Jobs
Probationary periods, career changes, or even status changes can be subject to very strict rules when it comes to mortgages. This includes changing from a salaried to a commissioned position, requesting a leave of absence, or accepting a new bonus structure. If you think a change in your job might affect your ability to secure financing speak with your Loan Officer.
Don’t Make Undocumented Deposits
Primarily large but sometimes even small deposits must be sourced unless they are identified. Make copies of checks and deposit slips. Keep your deposits separate and small. Avoid depositing cash.
Don’t Wait to Liquidate Funds From Stock or Retirement Accounts
If you need to sell investments, do it prior right way and document the transaction. Don’t take the risk that the market could move against you leaving you short of funds to close.
Don’t Ever Be Afraid to Ask Questions
If you’re uncertain about what you need or what you should do, your loan officer will be there to help you through the process, even long before you intend to buy.
For some buyers, an FHA loan may work when others can’t.
The FHA loan program is designed to help promote homeownership. Loans distributed through this program are insured by the Federal Housing Administration. For many buyers, FHA loans make it easier to qualify for a mortgage.
When it comes to FHA Loans, here are a few of the features that can be beneficial:
- Low Down Payments – As little as 3.5% down will work in most instances, and 5% covers most others.
- Higher Loan Amounts – In some areas, FHA maximums can exceed conventional loan limits.
- Lower Total Cash to Close – Sellers can help pay closing costs, and borrowers can receive gift money toward their down payments.
- Streamlined and Cash Out Refinancing – Subsequent refinancing can be far easier and more lenient than with conventional loans.
- Purchase and Rehab Financing – The FHA 203k loan can be a great option for the purchase of homes in need of a quick spruce up or even major remodeling when you don’t have sufficient funds to do it on your own.
Not connected with a Loan Officer yet? Find one at a branch near you.
They say that the first step is always the hardest, and that can definitely be true when it comes to buying your first home. Many people know that it makes more sense for them to buy than it does to rent but are not sure where to begin.
It is understandable that purchasing a home may seem daunting but you shouldn’t let intimidation get the best of you. You don’t need to know the finer details of the process to get started, and once you begin you will have experts to guide you. If you are considering becoming a homeowner, here are some simple first steps to get you on your way.
Step 1: Reach Out To A Loan Officer
Unless you are buying a home with cash, the first and most important step toward becoming a homeowner is to meet with a licensed mortgage Loan Officer. A Loan Officer will serve as your guide through the financial side of the home buying process. They will help you with everything from reviewing your credit and loan options, to securing pre-approval and financing.
If you don’t already have a Loan Officer in mind, and would like to work with Marketplace Home Mortgage, you can visit the “Find A Loan Officer” page on our website. Choose a branch near you, and then browse the websites of mortgage professionals who are available to help you at that location.
Once you have found a Loan Officer you would like to work with, call or email to set up an initial appointment. During this appointment, they will help you review your current financial standing by looking at things such as your credit score and income. They can help you determine if there are any credit issues you should work on before you start your house hunt. If you are ready, your Loan Officer will work with you to determine what you can afford and help you get pre-approved.
Step 2: Select A Realtor®
Once you have found and met with a Loan Officer, the next step is to find a licensed REALTOR® that you trust. Your Loan Officer may be able to recommend an agent that their past clients have worked with, or you may have friends and family who have referrals from within their sphere. There is also an abundance of sites that can help you find an agent.
Just like with a Loan Officer you can browse their website, read reviews and meet with them to determine if they are someone you would like to work with.
Step 3: Find Your Dream Home
Once you have your home buying team in place you can start in on the adventure of choosing a home. Your Realtor® will help you find the perfect home and navigate the purchase process, while your Loan Officer helps with the remaining steps required to secure financing and make the purchase.
Although the home buying process may seem daunting, with the right team in place, you will have experienced professionals there to guide you through every step. The only one you have to take on your own is the first.
Give a Marketplace Home Mortgage Loan Officer a call and get started today.
Lending services may be provided in certain states by Marketplace Home Mortgage, L.L.C. (NMLS#1082). This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal, and title report.
If you are interested in learning more about becoming a homeowner, our loan officers can help you get started.
You’ve probably heard some of the logical reasons to become a homeowner. When you own your own home you are building equity rather than throwing away money on rent. You are eligible for valuable tax write-offs, and unlike rent, fixed-rate mortgage payments cannot rise over the years to come. However, many young people are still afraid of committing to owning their own home. What they might not realize is that home ownership offers many freedoms of it’s own. Here are 5 of our favorites. READ MORE