Buyers should apply for a loan before looking for a home. They should get a pre-approval letter from their lender before they find a specific home they are interested in.
This is a good strategy because it ensures the buyer can afford the homes he is looking at. It eliminates the risk of a buyer falling in love with a home that is out of their price range. Plus, any gifts, or co-signers will already be in place. Once they find a property the preapproved buyers can move through the loan process quickly.
I have a property in escrow and one of the biggest issues in closing a home is funding. It is important that the buyer keep his credit rating in good standing through closing.
In the excitement of getting ready for a new home, buyers may go out and buy additional things for their new home. So I want to go over the 7 Don’ts of Mortgage Funding (Shift, by Gary Keller).
7 Don’ts of Mortgage Funding
1. Don’t change your employment status.
2. Don’t make any major purchases (cars, furniture, home theater, vacations etc.).
3. Don’t increase your credit card debt or miss any payments
4. Don’t change bank accounts or make undisclosed large deposits.
5. Don’t apply for a credit card, co-sign a loan or make a credit inquiry.
6. Don’t spend money you have set aside for closing, not any, not ever.
7. Don’t delay in providing all paperwork asked for by the mortgage company.
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