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Top Eight Things You Should
NOT Do Before Applying for a Home Loan
1. DON'T .. buy or lease an auto. The lender looks carefully at the debt-to-income ratio
and a large payment such as a car lease or loan can greatly impact those ratios and
prevent you from qualifying. Also, each time an auto dealer or car insurance company
checks your credit, your credit rating will be reduced.
2. DON'T .. be tempted by low introductory rates or store discounts offered with new
credit cards. Each time a creditor opens an account for you they check your credit. Each
time they check you credit, an inquiry is created in your credit file, which reduces your
credit rating. And each new account that is opened will further reduce your credit rating
because you are taking on more
debt.
3. DON'T .. move assets from one bank to another. These show up as new accounts or large
deposits and complicate the application process, as you must then document the source of
funds for each new account. It is better to let the lender verify each account before you
move the funds around.
4. DON'T ..
change jobs. Even if you earned bonuses or commissions in your previous job, the lender
will not be able to use this income in a new job until you have a year or two of earnings
history behind you, which could seriously impact your ability to qualify for a loan.
5. DON'T .. buy new furniture or major appliances for the "new house". If the
new purchase increases your debt load, it can disqualify you from the loan or deplete your
funds to close. And don't forget, each time someone checks your credit or you open a new
account, your credit rating will be reduced.
6. DON'T .. attempt to consolidate bills before speaking to your lender. The lender can
advise you if this needs to be done.
7. DON'T .. pack or ship information that may be needed for the loan application.
Important paperwork such as w-2's, divorce decrees, and tax returns should not be sent
with your household goods. Duplicate copies can take weeks.
8. DON'T .. throw away pay stubs and bank statements. Save everything until after your
loan closes. You will need to provide one to two months' worth of documentation when you
apply for your loan, and you may need to provide additional paperwork prior to closing.
If you have done any of these, contact your lender. Even if you have been pre-qualified.
They can help you re-qualify if necessary and advise you of your options.
*Article by Dennis Smith, visit www.SanDiegoHomes4u.com for more original content like
this. Reprint (or reprint with your modifications) permitted if this footer is included.
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