If you are planning to purchase a property within the next year, there are specific mistakes that you should avoid as they can impact your ability to get a mortgage. Below are 5 common buyer mistakes in Washington.
Mortgage companies evaluate your debt to income ratio. Increasing debt either on your credit cards or with new loans might dramatically change that percentage. In general, the more debt you incur, the less you can qualify for on a mortgage. This is especially important once you have identified a home and have initiated the mortgage process. Mortgage companies will re-check your credit report immediately before closing to ensure that your status has not dramatically changed. If you built up new debts, this can lead to issues with getting the loan.
As part of the approval process, mortgage companies review your past and present employment to analyze your ability to make payments. Consistency in employment is very important. Moving employment prior to or during the mortgage process can create problems with qualifying for a loan, especially if the new job is in a separate line of work or at a lower pay rate. During the mortgage process, it will also create delays while the new job is confirmed.
Mortgage processors normally analyze your bank account history over the last few months. Moving funds to a different bank can lead to delays. It is recommended that you keep funds in the current place until the closing completes.
Most types of mortgages require that you use a certain amount of your own money for the down payment and/or closing fees. Banks confirm this by analyzing bank statements. Any cash deposits are closely scrutinized. You may be asked to verify the source of those deposits.
While preparing to buy a property, you may decide to pay off credit cards. Before starting this, consider speaking with a mortgage professional on whether it is required given your financial figures. If you do pay off bills, do not terminate the accounts as this will reduce your credit rating. It is better to leave the accounts open without a balance.
The above Washington 5 common buyer mistakes in Washington are only a few examples. As a local real estate broker, I can refer you to local lenders in the Washington area. You may reach me, Blaine Bickelhaupt, at Blue Mountain Realtors via phone at (509) 382-2020 or email at email@example.com.