The Do’s and Don’ts When Preparing to Purchase Your Home!

We all get excited when it’s time to make that BIG purchase in our life. Whether you are a first-time homebuyer or refinancing your home, there are some guidelines that you should keep in mind.

Do’s

• Get Pre-approved for Your Loan – There are many reasons to get pre-approved at the beginning of a loan. It helps to establish a loan amount range you can afford. You don’t want to over extend and put yourself into a loan that you will not be able to afford down the road. Another advantage is it can speed up the process once you find that desired home. Having a pre-approval commitment letter can put you in a stronger bargaining position in this active and competitive housing market.
• Check Your Credit – Your credit score is an essential tool when applying for a mortgage. It is a good idea to make sure you are financially prepared. Your credit score is a significant part when determining the type of loan you qualify for and the interest rate you can secure. You can obtain your free credit report annually from AnnualCreditReport.com. Check to see if there are any discrepancies or errors which can hinder your FICO score. Clarifying these problems can boost your credit. Lastly, always continue to make payments on all credit accounts on time.
• Compiling Financial Documents: Part of the loan process is providing the lender with financial documents to verify the applicant’s information. You will need to prove your income and assets. Pay stubs, bank statements, financial account statements and, in some cases, tax returns will all be required before closing. If you can gather and return all the requested documents early on, it will make the loan process more manageable.

Don’ts

• Change Employment – You will need to show that you can qualify for your mortgage. Financial stability and a regular income is the pattern the lender wants to see. Changing jobs could affect your situation of obtaining or delaying a loan. Recent job history and income is an essential part of qualifying for a loan.
• Make Major Purchases on Credit – Opening new charge cards, buying a new/used vehicle and taking a vacation on credit can all affect your credit ratings. Increasing your financial obligations can impair your debt-to-income ratio, drop your credit score and jeopardize your loan approval. This also includes co-signing on any loan. A final credit check can be done prior to closing, and you don’t want to be denied the mortgage because of a negative change in credit. Playing it safe is the best option.
• Cave into Pressure: Ask questions and expect answers on any part of the loan process that you don’t understand. If you are not sure of the loan process, read all mortgage disclosures and don’t sign anything unclear. Keep these disclosures handy for easy review. Know the financial and practical elements that are involved with your loan.

Donna Pettola

Office: 844.788.7237 x7388

Cell: 203.747.1409

dpettola@northeast-mortgage.com

NMLS: 206088