Congratulations! You've been pre-approved for a home and you're home search has begun. Maybe you've already made an offer and it's been accepted. Between reading inspections and picking out paint colors, you're probably spending some time following up with your lender. Most first time home buyers and even some experienced homeowners don't realize that a pre-approval isn't a loan approval. So what can you do to make sure that loan gets approved? We've covered five things that can help.
1. Control Your Credit. Don't put new furniture on a credit card. Don't get a loan for a new car or a boat or any other major expense. In fact, if you have a balance on any of your credit cards, talk to your loan officer before you add anything significant.
2. Keep Your Accounts Consistent. Your lenders will review your most recent bank statements. If there's a major discrepancy between the months, (even if that's a big deposit) that raises red flags with your lender.
3. Stay In Your Current Job. Do not quit or change employment while applying for a loan. Sometimes a job loss is completely unavoidable, but if it is, avoid it at all costs. Even a promotion where your payment structure changes, like going from salary to commission, can cause a home loan to falter.
4. Don't Co-Sign on a Loan. Is your child headed to college or need a new car? Forego co-signing on any loans until after your home loan is complete. Remember that a major component the lender will be looking at is your debt to income ratio.
5. Pay Your Bills. This should go without saying. Make sure your bills are paid on time throughout the lending process (and all the time, really). Getting behind on even one bill could negatively effect your credit score which could cause the bank to offer a much higher interest rate, if they approve the loan at all.
If you're planning to purchase a home in the coming months, it may be beneficial to talk to a mortgage lender now. Most lenders will be happy to help you plan for a mortgage and will offer advice in raising your credit score, gathering documents, and what to expect during the home loan process.
If you are ready to purchase a home, we would be happy to assist however we can. We work closely with home buyers to find homes that meet their lifestyle and budget. We offer a customized home search that alerts buyers as soon as a home that meets their criteria comes on the market. For more information, call 775-453-4568 or fill out this brief form and we'll get back to you as quickly as we can.