If you are thinking about purchasing a property in the near future, there are particular things that you should avoid doing as they will affect your loan options. Below are West Newbury MA credit mistakes to avoid.
West Newbury MA Credit Mistakes To Avoid
Mortgage companies review your income compared to your debt. Making major purchases either on your credit cards or with new loans might significantly change that ratio. In general, the more debt you incur, the lower your loan qualification. This is particularly critical after you have under agreement to buy a property. Mortgage companies will re-run your credit report shortly before final approval to verify that your status has not significantly changed. If you took on new debts, this can result in you not being qualified to purchase the home.
As part of the mortgage process, mortgage companies look at your previous and current earnings to evaluate your ability to pay back the loan. Consistency in employment is essential. Moving jobs prior to or during the mortgage step can create issues with qualifying for a loan, especially if the new employment is in a different line of work or at a lower pay. During the loan process, it may also cause delays while the new employment is confirmed.
Mortgage processors typically evaluate your bank account history over the past several months. Transferring funds to a different institution can lead to delays. It is advisable to leave funds in the same place until after the closing.
Large Cash Deposits
Most types of mortgages mandate that you use a certain percentage of your own money for the down payment and/or settlement fees. Mortgage companies verify this by analyzing bank statements. Any cash transactions are closely scrutinized. You may be asked to verify the source of those transactions.
Shutting Down Accounts
While preparing to buy a property, you may try to pay down debts. Prior to doing this, think about consulting with a mortgage professional on whether it is required based on your financial standing. If you do pay off bills, do not terminate the accounts as this may affect your credit score. It may be best to keep the accounts open with no balance.
More Information on West Newbury MA Credit Mistakes To Avoid
The above West Newbury MA credit mistakes to avoid includes only the most common mistakes. As a local real estate professional, I can provide you with a list of local lenders in the West Newbury MA area. You may reach me, John Wells, at Wellsco Realty via phone at 978-518-1481 or email at email@example.com.