Getting a mortgage
Most people need to get a mortgage in order to buy a house. If this is your case, the first thing you’ll want to do is talk to a mortgage lender. But before you do that, take a few moments to read the tips below to make it more likely you’ll be approved or that your interest rate and terms will be favorable.
- talk to a mortgage lender to see what you might need to do to qualify
- get a free credit report and make sure there are no mistakes on there
- clear up any issues on the report
- consider using a credit counsellor if needed
- pay down debt on “revolving” accounts (credit cards…) to less than 35% of your available credit
- make all payments on time to keep your credit score up or improve it
- save money for a down payment and closing costs
- save money for a cash reserve for emergencies
- contact us with any questions you have or to be connected with a mortgage lender.
Keeping your mortgage
Once you’re approved for your loan, you need to protect your loan. The following is a list of things NOT to do while getting your home purchase and mortgage finalized. ANY changes in your financial situation can impact your ability to get approved. Yes, even “good” changes to you credit can at a minimum delay the process. In short, don’t do anything financial your lender didn’t expressly tell you to do. And if you are thinking of doing something, call and ask them first. These rules also hold true when working on getting approved for your loan.
- quit your job
- change employers
- change the way you get paid (i.e. from W-2 to 1099)
- obtain new debt (no new cars, furniture, appliances…)
- get new lines of credit, store accounts or have anyone pull your credit except the lender
- charge up your credit card balances (even if you plan to pay them off before closing)
- make large deposits or withdrawals to or from your bank account (including accepting financial gifts from family or friends)
- move money between your own accounts without consulting your lender
- change your mind after locking a rate
- co-sign for someone else’s loan
- pay off someone else’s loan
- spend your down payment money
- spend more than you normally do (ideally you should be spending nothing but your mandatory monthly expenses)
- schedule a vacation prior to closing
- file for divorce prior to closing
- pay off credit cards, collections or other accounts (unless instructed to by your lender)
- close credit card accounts even if they have a zero balance (unless instructed to by your lender)
If you follow these simple rules, your loan process will be a smooth one!
WHAT ELSE TO EXPECT:
- to provide tons of paperwork to the lender
- to pay for the appraisal immediately (within a few days from acceptance)
- jump through last minute Underwriting hoops about a week before closing (Yes, this happens to everyone)
- a credit report to be pulled right before or even right AFTER closing
- not to buy anything new until a WEEK after closing just to be safe
Please talk to your lender before doing ANYTHING that involves money. Sometimes the slightest changes in your financial behavior can impact your loan approval.
For more information on the different kinds of financing, check out this blog post!