If you are thinking about buying real estate in the near future, there are certain mistakes that you must avoid as they may impact your financing options. The following are Franklin TN buyer mistakes to avoid.
Franklin TN Buyer Mistakes To Avoid
Mortgage companies evaluate the percentage of your debt compared to your earnings. Making large purchases on either your credit cards or with new loans may dramatically shift that ratio. Usually, the higher your debt, the lower your loan qualification. This is even more critical once you have completed your formal loan application. Mortgage companies may re-run your credit report immediately prior to closing to verify that nothing has changed. If you incurred additional debts, this can lead to you not being qualified to buy the home.
As part of the approval process, mortgage companies look at your past and present earnings to analyze your ability to make payments. A solid history in employment is essential. Shifting jobs before or during the approval process can create issues with qualifying for a loan, especially if the new job is in a different line of work or provides lower income. During the loan process, it can also cause delays while the new employment is verified.
Mortgage underwriters generally evaluate your bank account statements over the last few months. Moving money to a new institution may create delays. It is best to leave money in the current location until after the loan closes.
Large Cash Deposits
Many types of loans require that you use a specific amount of your own funds for the down payment and/or closing costs. Mortgage companies confirm this by reviewing bank statements. Any cash transactions are closely analyzed. You may be asked to verify the source of those deposits.
While preparing to buy a home, you may try to diligently pay off debts. Before starting this, consider speaking with a loan consultant on whether it is necessary given your financial standing. If you do pay off debts, do not terminate the accounts as this will impact your credit rating. It is better to leave the accounts open without a balance.
Additional Information on Franklin TN Buyer Mistakes To Avoid
The above Franklin TN buyer mistakes to avoid are only a few examples.
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