If you are planning to buy a house in the next year or so, you probably have looked into the requirements for obtaining a mortgage loan. You’ve done the obvious things like cleaning up your credit, and saving for a down payment. Those are the things you do to obtain a loan. There are some things you may be unaware that you should not do, that may hurt your chances of obtaining that loan.
How’s your employment situation? You need to save your pay stubs so you can prove you’re making enough money to pay for a loan. However, if you are self-employed, you will need to have your tax returns for the past couple years. This brings us to the don’t part of the equation. Now is not a good time to change from a position of employment to being self-employed. If you have the entrepreneurial spirit, you should keep it at bay until after you have obtained the loan. Changing now could mean you won’t qualify for a loan for another two or more years. If you are already in the process of changing, you may want to ask your lender how that will affect your chances.
Some people aren’t very careful about their personal checking accounts. These days, the banks supply contingencies for overdrafts with automatic short-term loans, so it is easy to become complacent. If you are frequently acquiring overdraft fees, a lender may view that as a sign of irresponsibility. If you can’t even keep your checkbook balanced, how can you be trusted to be on time with your mortgage payments? Begin now to keep a running balance and don’t write checks or make withdrawals you can’t cover.
Small matters matter. A lot of people think that if a bill is only a few dollars, they can just wait and pay it later rather than by the actual due date. Don’t wait until you get a second, or even third reminder. Pay promptly. Lenders will be looking at these kinds of habits when they consider your application for a loan.
Taxes can be a real headache. A lot of people put off filing, because they think they can catch up before the bureaucratic system catches up to them. They might even go through the trouble of filing for an extension but then they’ll miss the extended filing date. This will not set well with a lender. Don’t ignore the tax deadlines!
If you are applying for a loan, now is also not the time to apply for other credit. You may think that it will help you if you transfer a balance to a new credit card to get a lower interest rate. That isn’t always the case. Wait until you are in your new home before you consider any new loans.
The Casey team can put you in touch with reliable lenders, and help you with any aspect of your real estate needs. Give us a call!