When you are in the process of purchasing a new home, it is crucial that you do not do anything that would hinder your mortgage company to change the terms of your loan. In some cases, major changes could even lead your lender to not allow you to get a loan. From avoiding large financial changes and spending to stability and staying within a budget, learn what Denver realtors recommend to do and not to do when purchasing a house.
Don’t Make Large Financial Changes or Spending
As soon as you even consider purchasing a new home, it is important to keep the status quo with your spending and debts. You do not want to make any major changes. This will keep your debt-to-income ratio the same. Once your debt-to-income ratio increases, it can change terms of a potential loan. Major changes you will want to avoid include charging more to your credit card, taking out loans, purchasing a new car or applying for new credit. Any of these changes can change the status of your credit and therefore could negatively affect your loan application or amount a mortgage company is willing to lend.
Maintain Stability (don’t close credit cards or switch jobs)
Stability is the key when in the process of purchasing a new home. You won’t want to make any other huge life changes as well. This can include changing jobs. While you won’t be able to help it in certain circumstances, it is crucial to examine how it may affect your mortgage. Your job background and history at a company helps to show that you are an ideal and reliable candidate. Typically lenders will look at how long you have lived in a current home and how long you have worked at your current job to help build a picture of how stable you are.
Stay Within Your Budget
As you are working with a lender and they are reviewing your application, they will look at your credit and income to see how much you can borrow to purchase a new loan. In some cases, they may approve an amount higher than you expected. Just because they offer this does not mean you should use this as your budget when searching for homes. You need to work with your realtor to determine what your monthly payments will be and choose a top amount to use when searching for homes. Don’t exceed that amount. For more, read The Simple Dollar’s Why You Should Buy Less House Than You Can Afford
As you are looking to purchase a new home, The Giving Back Group can help you every step of the way. We will help you with a roadmap to help you determine your budget and max amount that you can spend on a home. For more tips on what to do when preparing to purchase a home, read our guide to managing your finances if you plan to buy a home in Denver
. To get started on your new home search, call us today at 303-881-4881.