Buying a home is the biggest purchase you’ll ever make, and for first-time buyers, the financial process can be overwhelming. And for a good reason: making even a small mistake can cost you your dream home. That’s why it’s crucial that you review some of the most important financial tips so that you can present yourself as a strong buying candidate.
Look at these credit do’s and don’ts when buying a house so that you can have a smooth home-buying experience:
- DO: Check Your Credit. Before you start looking at houses, check your official credit report. You’ll need a copy of your credit report to buy a home, and you’d be surprised how many vendors will want to offer you a credit card or loan. Getting your report in advance will prevent you from excessive credit checks—which can also negatively impact your credit score.
- DON’T: Finance A Car. Do NOT use your credit to finance a car or any other major purchase while trying to close a house. Lenders will always do a credit check close to the end of the sale, and any new significant debts added to your credit could ruin the final loan approval. It may be tempting to buy new furniture, appliances, or other home purchases for your home, but try to wait until after the sale of the house.
- DO: Continue Paying Credit Card Debt. Your FICO score is crucial to the approval of your loan, so continue paying off any credit card debt you may have and stay as current as possible on other monthly payments you may need to make on other loans. It will present you as a reliable and competent borrower.
- DON’T: Change Jobs. Consistent employment and income stream are essential to getting loan approval. Switching from a salaried job to an hourly or commission-based job could raise some red flags for loaners. If this is you, you’ll likely need about two years of experience at your employer to establish a stable employment history. It is particularly true if you’re switching industries or fields. You won’t need to worry as much if you’re changing jobs to another similar job with the same pay structure.
- DO: Get Pre-Approved. To avoid disappointment, get pre-approved for a mortgage before looking at houses. It will give you a realistic expectation of what kinds of homes you can afford. Pre-approval can take a long time to complete—if you find a house you love and then start the pre-approval process, you could risk losing the home to another buyer.
Choose a real estate agent that will genuinely take the time to understand your wants and needs. Contact Sandy Majetich-Toth with Coldwell Banker, at 815-791-2215. I can help you in your search for a new home or help you sell your current property. Let’s get started today!
Sources:
https://www.newhomesource.com/learn/dos-and-donts-of-buying-home/
https://www.transunion.com/blog/home-buying/how-to-prepare-your-credit-to-buy-a-house
https://www.rocketmortgage.com/learn/first-time-home-buyer-mistakes
https://www.homestarfc.com/blog/dos-donts-when-buying-home/
https://themortgagereports.com/84659/what-not-to-do-before-buying-a-house
