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10 Commandments

10 Mortgage Commandments of Buying a Home

Story By Jada Stratton and Rose Stephens

Are you planning to buy a house soon? Many factors can affect your ability to qualify for  mortgage approval. There are several things that you want to make sure you know before  attempting to buy a home. Here are some “rules” to follow when buying a home to maximize  your chances of purchasing a home. 

  1. Thou shalt not change jobs, become self-employed or quit your job. A stable income that  you can prove is a vital part of the home loan process by securing better rates and terms. If  you have recently changed jobs, it can also affect your qualification because it is harder to  prove that you will remain at that job in the future. 
  2. Thou shalt not buy a car, truck, or van unless you plan on living in it. Large purchases,  such as a car, come with a high-interest loan that can impact your credit score, which  affects your mortgage. 
  3. Thou shalt not use credit cards excessively or let current accounts fall behind. If you have  a history of credit card debt or a bad history with credit cards will hurt your chances of  getting a mortgage loan. 
  4. Thou shalt not spend money you have set aside for closing. Keep in mind there will be  closing costs and other expenses when buying a home. Make sure you set aside the money  and do not touch it until it is the right time. 
  5. Thou shalt not omit debts or liabilities from your loan application. Most borrowers think  that if they leave off liabilities or debts in their applications no one will find out. During  the underwriting process, the underwriters are very thorough and will notice if you omit  anything on your application. By omitting liabilities in your application, it can make the  loan more difficult to work through and make you look like more of a risk for lending money.
  6. Thou shalt not buy furniture on credit. We know it is exciting getting a new home and  thinking about all the new furniture and appliances you want, but you should hold off until  your loan closes. Buying those things on credit can ruin your ability to get approved for  the loan. 
  7. Thou shalt not originate any inquiries into your credit. Don’t do self-run credit checks,  they can hurt your credit more. Let your loan professionals do that for you.
  8. Thou shalt not make any large deposits without checking with your loan officer. Receiving large deposits in your bank can look suspicious, no matter where the money  came from. Consult with your loan officer for advice on what to do with these types of  deposits, they will be able to help you and give advice on how to proceed.
  9. Thou shalt not change bank accounts. Switching banks before your loan approval might  change your status. Lenders like to see that you have a stable financial history and going  to a new bank can affect that.
  10. Thou shalt not co-sign a loan for anyone. Do not co-sign a loan with anyone, when you do  it can add to your debt and make it harder for you to get approval. 

Be sure to speak to a licensed Loan Originator for more details if you are in the market for a new  home or refinance. We have several who are all knowledgeable and available to answer any and  all of your questions. Call or email s today!