Financial Tips To Avoid Costly Mistakes

Understanding some basic information about how a lender and more importantly an underwriter will review your financial situation can help you avoid costly mistakes. Including mistakes that could prevent you from owning your dream home.

Position Yourself For Success

Have a mortgage professional review your credit with you before making an offer on a home.

Stay Low

Keeping your credit card balances low is even more important once you start the search for a new home.

No New Cars

This is not to say you can’t purchase a home and a car in the same time period. It merely reemphasizes the importance of understanding your debt to income and how that impacts your borrowing power.

Maintain Reserves

Reserves are a very important element that is highly scrutinized by loan underwriters. Lenders will look at your savings and investments. For first time buyers, there are some loans that do not require reserves.

Avoid Switching Banks

This is not to say you can’t move funds within the same institution, but you will be asked to provide documentation to verify balances on all savings and investments prior to closing your home loan.

Get a Head Start

The more prepared your financials are for scrutiny by underwriters, the happier you will be with the interest rate you qualify for and with expeditious process of providing you a viable preapproval letter.

For additional detail on these topics, check out the following one page fact sheets in the library section of this website.

  • Credit Scoring
  • First Time Homebuyer Tips