The journey to purchasing your first home is less stressful and more exciting when you trust your financial stability to afford one. In addition to finding the right home for you to settle in, it’s crucial to choose a great mortgage lender like CREFCO to help you along the way. Buying a new home can take a toll if you don’t have the right people on your side. When making a significant financial decision like buying a home, the last thing you want to do is to make that decision without doing your research. Below are some of the common mistakes not-so-savvy home buyers make.
Pay Attention to Your Credit Score
We don’t often think about our credit score until we rely on it for a loan. As credit scores remain one of the top factors lenders consider before approving a mortgage loan request, ignoring it might cause issues. If you stay on top of your score, you will also catch discrepancies if they occur. This is vital since clearing up those discrepancies can take time. Updating and removing any errors on your report is essential if you want to qualify for the loan that you want. There are many free options to check your credit score, or you can opt for a paid site. The important thing is to check it consistently.
The Importance of Pre-Approval Qualification
The real estate market moves quickly. When you find a home you love, you don’t want to wait for financing to make an offer. You want to make an offer as soon as you find that dream home so you don’t risk losing it. As you assess different listings for a potential home to buy, ensure you get pre-approval from various mortgage lenders. The home seller might not take you seriously in your search for a home if you can’t produce pre-approval documents. The documents not only prove your ability to pay bills but also to afford the house. A pre-approval letter can be the competitive edge you need in a fast-paced reality market.
Curbing Big Credit Purchases
Running up your existing credit accounts can be as dangerous as closing and opening lines when determining your credit score. Your ability to properly manage your finances and credit will prove you’re able to be responsible for the consistent payment of a mortgage loan. While you’re looking for a home, do your best not to make large purchases on credit. Emergencies happen, but there’s no need to buy things like furniture until you’ve closed on your home loan. If possible, it’s even better to wait a few months after your loan closes to make large purchases. This allows you to assess how the mortgage payment will affect your budget.
Changes in Employment
Not only is your credit score used to evaluate your ability to pay back your mortgage loan, but your employment stability also plays a factor as well. Lenders might worry if you’ve just changed jobs or have had several jobs in the past few years. It’s possible this instability could affect your financial options for mortgage loans. It is especially important to maintain your current job after being pre-approved for mortgage financing if possible. Most lenders will not settle for anything less than two stable years of employment before approving your request.