If you are planning to buy a property within the next few months, there are certain mistakes that you should avoid as they may affect your ability to get a mortgage. Below are 5 things to avoid before purchasing real estate in Arlington MA.
5 Things To Avoid Before Purchasing Real Estate In Arlington MA
Lenders review the percentage of your debt to your overall income. Making large purchases either on your credit cards or with new loans may significantly shift that percentage. In general, the more debt you have, the less you will qualify for on a home loan. This is even more important after you have found a home and have started the loan process. Mortgage companies will re-run your credit report shortly before closing to ensure that things have not changed. If you built up new debts, this can lead to issues with getting the mortgage.
As part of the mortgage process, mortgage companies look at your previous and current employment to determine your ability to pay back the loan. Consistency in employment is essential. Changing employment before or during the loan process can create difficulties with qualifying for a loan, especially if the new job is in a different line of work or at a lower pay. During the loan process, it will also create delays while the new job is confirmed.
Mortgage underwriters usually review your bank account history over the last few months. Moving your money to a different bank may create issues. It is recommended that you leave money in the same place until the closing is done.
Most types of loans mandate that you use a specific amount of your own funds for the down payment or closing fees. Mortgage companies verify this by reviewing bank statements. Any cash transactions are closely scrutinized. You may be asked to verify the source of those deposits.
Shutting Down Accounts
While preparing to buy a property, you may decide to pay down credit cards. Before starting this, think about speaking with a mortgage professional on whether it is needed given your financial situation. If you do pay off debts, do not close the accounts as this will reduce your credit rating. It is better to leave the accounts open with no balance.
More Advice on 5 Things To Avoid Before Purchasing Real Estate In Arlington MA
The above 5 things to avoid before purchasing real estate in Arlington MA is only a few examples. As a local real estate professional, I can refer you to local lenders in . You may reach me, Scott Strang, at Scott Gregory Group via phone at 781-646-7600 or email at firstname.lastname@example.org.