Things to remember during the home buying process.

Here are some common mistakes people make during the approval process that has cost them their new home loan.

1) Make sure you continue to pay ALL of your bills on time and do not open any new accounts. These actions will cause your score to drop.

I have had 2 clients in the past 6 months lose their financing for forgetting to pay a $25 per month credit card bill! Not only are lenders looking at your credit scores but they are also looking at your payment history. Even if the score doesn’t drop enough to knock you out, the payment history may.

2) Do not change jobs if at all possible. Try to wait until after you close on your new loan. If it’s too good of an opportunity to pass up, let your lender know as soon as possible so they can make arraignments and prepare the underwriter. You will be required to provide more paper work so keep that in mind. Your employment is a key factor in the mortgage approval process, and if you can’t show steady gainful employment, you might be denied.

3) Do not change financial institutions during the approval/underwriting process. Even if you hate your current bank, tough it out until after closing. You’ll have to provide information about previous accounts that are now closed, and therefore inaccessible. And if you diversify your money too much in money market accounts, savings accounts, checking accounts and other places, you’ll have a harder time with the disclosure process.

4) Hold off on any and all large purchases. Don’t go out and buy that new plasma TV or living room set until after you are in your new home.  Until you are actually closed the underwriter will follow very specific steps including verifying and re-verifying everything at different points throughout the process. Any large purchases will affect what funds you have available that may be required for your down payment, closing costs or reserves.

Here is what I really want you to remember. If you plan on buying a home, make that your priority. Be ready to provide everything your lender requires at a moments notice.

If you don’t try and take on more than one life changing event at a time, your home buying experience will be smooth.