Don't Do These 5 Things Before You Buy A Home
Sahil Chhabra, 39, recently finalised a home for himself and his family. He also received an approval for his home loan and was ready to sign the dotted line, but then his lender decided to take back the loan approval. Thinking why? Once everything was in place, Chhabra, a marketing professional, bought a new car on loan. This affected his credit score and the bank took back the home loan approval.
For Chhabra, who worked hard towards creating a positive credit profile over the years to get the mortgage approval , saved for years to make the down payment and also, repaid the loans he took, this one wrong move cost him. As a home buyer, remember that your lender might just check your credit before the settlement date. Make sure nothing has changed during the time frame between loan approval and settlement date.
Don't move your money
Do not move your money without the right paperwork. The first thing that the lender during checks would want to see is your bank statements. In case you have taken heavy deposits or made heavy withdrawals, make sure you keep the statement ready and also the paperwork regarding where this money came from or was used, respectively. Also, as a piece of advice, before you apply for mortgage, keep all the money you will use for down payment in one account.
You don't want to be burdened by debts for sure. Do not take any further debts while you have already applied for home loan. Your income-to-debt ratio will come to play an important role along with your credit score when taking a home loan. Taking a loan apart from your home loan might just take your income-to-debt over the acceptable limit.
Repay your debt on time. It is imperative that you do not miss on any of the payments, and not delay them either. Be on time or even before time. This, otherwise, will have a negative impact on your credit score, the last thing you would want right now.
Got a new job offer that pays you well and also, takes you in the right direction of your growth path? Avoid taking it anyway. A job different from what you had while you applied for home loan could be a deterrent. A lender always verifies your employment status and also, needs payslips for verification, too. Hence, a change in job could be a cause of uncertainty.
Spend your savings
Keep your savings intact, you would need them when making a down payment at the settlement date. And before the settlement date arrives, the lender might want to check you cash reserves. You sure don't want to upset the lender with a cash reserve lesser than what you would need at the time of down payment.