| You are ready to buy a home, or are you? Most | | | | payments on that new purchase. |
| likely you will need a mortgage to purchase your | | | | |
| next home and you will need to qualify for that | | | | It will also impact your debt-to-income ratio, a very |
| mortgage. There are 3 things you should not do | | | | important ratio that determines the amount of the |
| before you buy a home. | | | | mortgage you can qualify for. |
| | | | | |
| These three things will make it eaiser for you to | | | | 3. Don’t Move around Money |
| qualify for that mortgage and get the best interest | | | | The lenders like to see that you have had the |
| rate you can. | | | | money in your bank account for at least a couple of |
| | | | | months. If they see new deposits of a large chunk |
| 1. Don’t Open any New Lines of Credit | | | | of cash into your bank account, they will ask you |
| When you apply for a mortgage, the mortgage | | | | where it came from. If it came from someone else, |
| broker will pull your credit report. They are going to | | | | they will want an explanation from you. If a family |
| look through it in detail to see how you have handled | | | | member is going to give you the down payment for |
| credit in the past. They will also look at your credit | | | | your new home, that’s OK, the lender just |
| report to see your recent activity. If you have | | | | wants to know where it came from. Lenders view |
| opened up new lines of credit, they may view this as | | | | money that you receive as income different from |
| a negative since you are looking for sources of | | | | money you receive as a gift. Don’t try to hide |
| credit. They may see this as your inability to pay | | | | the source of the money, if they don’t trust |
| for your current expenses and you are using credit | | | | you they won’t make you the loan. Just let |
| to pay your expense. | | | | them know where the money came from and show |
| | | | | them the paper trail if they ask for it. |
| When you are looking to buy a house, hold off | | | | |
| opening up any new lines of credit, regardless of the | | | | The best thing you can do is be consistent in the |
| type, until after you own your home. | | | | months leading up to the purchase of your home. |
| | | | | Don’t make any new purchases, open any new |
| | | | | lines of credit, or move money around just before |
| 2. No Major Purchases of Any Kind | | | | buying your home. You want to make sure you |
| If you have a large purchase in the last couple of | | | | qualify for the mortgage first since this is the biggest |
| months, this could hinder your ability to qualify for a | | | | loan you will be asking for. |
| mortgage. If they see that you just purchased a | | | | |
| car or a boat, the mortgage broker knows that you | | | | After you own the home, then you can go out and |
| have a new monthly payment and you don’t | | | | buy the new car. |
| have a history of showing that you can make the | | | | |