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10 Commandments for Financing a Home

Financing a home is serious business…

 

Smart home buyers who take financing seriously, need to develop a close relationship with their mortgage broker in order to avoid financing pitfalls.

 

One way to get a great overview is to understand the 10 Commandments for Financing a Home.  These could be critical for your success in getting a loan.

 

Financing has gotten tougher for home buyers

 

Evaluating a borrowers qualifications for a loan is not what it use to be.  Lenders will ask you for everything except for your own DNA.  You need to be prepared for the volume of documentation needed.   You cannot hide any information from lenders, because with todays standards, they will find out anyway.

 

Become financially fit before your home search

 

Even if you are several months out from purchasing Orlando Real Estate the below 10 Commandments for Financing a Home can help shape up your credit.  One golden rule about the 10 Commandments for Financing a Home is not to violate any one of these while you are under a real estate purchase agreement to buy a home.

 

Be a smart borrower

 

Once you get under a home purchase contract and start spending money for the inspections and appraisal ($800-1000) be extra careful not to violate one of the 10 Commandments for Financing a Home.  It could kill your ability to qualify for the loan.

 

10 Commandments for Financing a Home

 

• 1) Thou shalt not change jobs, become self?employed or quit your job.  The lender will do an employment verification check again 1-2 days before closing.  We had a buyer submit job termination notice a day before closing, and the loan was denied.

 

• 2) Thou shalt not buy a car, truck or van (or you may be living in it!) A purchase of this size could decrease cash reserves that lender wants to see in your bank.  It could also create another liability that could affect your debt to income ratios.  Wait until after closing to buy anything.

 

• 3) Thou shalt not use charge cards excessively or let your accounts fall behind.  Large outstanding balances on credit cards can be a big negative on your credit report. A missed payment is immediately reported to your credit report.  Regardless of amount missed, it can gravely effect your score.

 

• 4) Thou shalt not spend money you have set aside for closing. We had a buyer spend half of their down payment hoping their college financial aid check would come in before closing.  It did not and buyer could not close.

 

• 5) Thou shalt not omit debts or liabilities from your loan application. You cannot hide your liabilities, they are all reported in credit report.  Even if not reported on the credit report, there are clues that cause lender to ask more questions about your past.  For example you cannot hide child support obligations.

 

• 6) Thou shalt not buy furniture. Buyers become alured with promotions of deferred payments with purchasing new furniture for their new home.  Its best not open up another liability and wait until after closing.

 

• 7) Thou shalt not originate any kinds of inquiries into your credit. Do not open any new credit cards, it can adversely affect your credit score and interest rate and ability to get a loan.  The lender will pull your credit report 1-2 days before closing.

 

• 8) Thou shalt not make large deposits without first checking with your loan officer. The lender will verify any large deposits to your bank accounts.  They will want to know where the money came.  Your entire financial picture must make sense. They do not want to see you borrowing money for the transaction.

 

• 9) Thou shalt not change bank accounts. Changing banks raises more questions for the lender.

 

• 10) Thou shalt not co?sign a loan for anyone. I had a buyer last year that checked with her mortgage broker before co-signing on her daughters college loans.  He said no-way and her loan was successful closed.  Thank goodness she asked first.

 

These 10 commandments originated from Thomas Powell, Mortgage Broker, with Movement Mortgage in downtown Orlando.  He educates all his borrowers on these 10 Commandments for Financing a Home.  Thomas Powell works for Movement Mortgage a direct lender offering a variety of loan programs for home buyers.

 

All borrowers who obey the 10 Commandments for Financing a Home will get to a successful closing. But before that you need to find the right home. Buyers Broker of Florida not only helps buyers find a home, but will also  keep you on the path to 10 Commandments for Financing a Home.  Call 407-539-1053.