Do's and Don'ts When Financing a Home

Reblogger Bob Crane
Real Estate Agent with Woodland Management Service / Woodland Real Estate, Keller Williams fox cities #1 in Forest Land Mgmt
Original content by Mike Cooper 0225086119

                                         Do's and Don'ts When Financing a Home

There are some do's and don'ts when financing a home purchase that you'll want to abide by to make the process as painless and simple as possible. Buying a home is not complicated if you have a great Realtor, a solid lender and a talented closing agent, but if you do a few unconscious things, it can be like being dragged over broken glass. Let me show you how to avoid that experience.

Don't - Don't do anything that will affect your credit report negatively.

Let's start with the most common and most unconscious mistake home-buyers make. Don't charge anything, buy anything on credit or skip credit payments. That may sound like commonsense, but in the excitement of the moment, some home-buyers will go out and buy new furniture on credit. After all, the local furniture store is having a great sale that will be over before closing, right? Wrong!

Don't do it. Just say no. Do whatever it takes to keep you from using credit, creating new accounts or expanding your current debt. Lenders will pull your credit when you start the process of buying a home. They will also pull it right before closing. If there are changes, it may, and probably will affect your ability to purchase a home.

Sadly, I just had a wonderful couple who finally found the right home. They could afford it, and it was in a great place. They wrote a solid offer, it was accepted, they were able to get some closing cost help and the seller was willing to do a number of home inspection repairs. Their first home purchase looked like it was finally going to happen. Then they bought a car. Their lender didn't have the "don't add debt" chat with them before the sought my help. They never mentioned it to me. I wish they had.

The car purchase torpedoed everything. They were declined their loan. They lost the money they had spent on the home inspection and appraisal and it could have been avoided. I like to say, "Freeze in place." Financing a home has a very specific criteria that a home-buyer should adhere to, and if they don't, they will fail like my clients.

Do - Pay your debts.

Pay your debts on time, every time. Pay off as many debts as possible and reasonable. Make sure you keep enough money in your accounts to close on your real estate purchase. This is not the time to play debt roulette. You can't ignore any bill prior to the financing approval and closing. Stay on course

Don't - Don't move money around 

This is a new one for me. I recently had a client who regularly moved money between accounts. If one account had a boost of .25 % interest, the money would be moved there. In the same way, if another one went up .125% in a week, the money was moved there. If the rate dropped on one account, money was moved from that one and invested somewhere else.

In the case, the lender had a hard time keeping up with this buyer's money. The rotating money wheel nearly caused the buyer to lose the home purchase. The money is there, somewhere, but the constant movement made lenders nervous.

Do - Freeze in place

This is another place where keeping things simple is critical. Don't move money. Don't make huge deposits unless you talk to your lender first. The lender will always want to know where the money is coming from. Is it borrowed from someone, or is it a gift? Is it from a closed insurance policy? Where is it coming from? Here again, freeze in place. Keep everything as simple as possible.

There are always things your lender will instruct you to do when you are financing a home. Make sure to listen and follow instructions. You don't want to add unnecessary stress to your home purchase. Keep it simple.

 

This post was originally posted at www.winchestervarealestate.com: Do's and Don'ts When Financing a Home. #mikecoopersellshomes, #cornerstonehomesales, #yourlocalrealestatesalespros.

 

1. What's a good home-buying timeline?

2. Winchester-Frederick Co., VA Real Estate Mid-Year in Review - 2018

3. Loudoun County, VA Mid-Year Real Estate Review - 2018

4. Passion is contagious. Infect somebody!

5. Live, laugh, love and eat dessert first!

6. Buying your first Winchester, VA home.

7. Skip the pre-qualification letter and go straight to the pre-approval.

8. Turn setbacks into springboards+

9. Reduce your mortgage by pre-paying principle and eliminating interest

10. What can I do to sell my home more quickly?

********************************************************************************


Give me a call, or email me for all your real estate needs, and let's make something am
azing happen. 

mikecooper@cbginc.net, 888-722-6029

Cell: 540-336-5522

 

Real Estate Sales and Property Management         

 

 

(Disclaimer:  All grammatical mistakes, punctuation breakdowns and misspellings are purely for your amusement and entertainment.   Feel free to cackle.)                                                                                                

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community

Spam prevention
Show All Comments
Rainmaker
2,929,248
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Bob. Seems like common sense. Then again, it never hurts to repeat it! Enjoy your day!

Dec 02, 2018 04:13 AM #1
Ambassador
2,891,234
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

A great one for a re-blog, Bob! As Wayne said, it seems like common sense but, still important to repeat with each and every buyer!

Dec 02, 2018 08:39 PM #2
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
3,724,213

Bob Crane

Forestland Experts! 715-204-9671
Have a Question, Leave me a Note!
*
*
*
*
Spam prevention

Additional Information