5 Mistakes We Have Seen Too Many Home Buyers Make
At Neighborhood Escrow we have helped many homeowners through the process of buying their home. We love to see the smiles on everyone’s faces when escrow is completed and they get the keys to their home. However, we have also seen people make serious mistakes. In an effort to prevent future clients from making similar mistakes, we have outlined five of the biggest mistakes we have seen. If you have questions or want to open escrow, contact us at 310-378-2456.
- Changing Your Job
- Changing Your Income-to-Debt-Ratio
- Opening New Credit Cards
- Not Staying in Touch
- Getting Behind on Bill Payments
We have seen it time and time again: A person decides to buy a home and then promptly gets a new job. Even if the job pays more than the old one, this can be seen as a bad risk for a lender. They want borrowers who have two years of history with the same company. This may not entirely prevent you from getting a loan but it could make it harder or result in worse terms. We recommend waiting until you have loan approval before changing jobs – and even then, talk to your loan officer before agreeing to the new hob.
One of the most important factors a lender considers when deciding whether or not to give out a loan is the ratio between a borrower’s monthly income and their monthly debt. Do not make a big purchase while you are in the middle of buying a home. This is true even if your loan has been approved – your lender may check your financials again when it comes closer to closing time. Taking on a car loan or other significant loan could result in you no longer qualifying for your loan.
Even if you do not put any charges on a new credit card, the fact that you opened it will affect your credit score and your financials. In fact, even having the credit card company run your credit could loser your credit score. We suggest simply waiting to open these accounts until after the loan has closed.
You should be in regular contact with your loan officer and your Escrow Officer. You want to always be aware of the what the timeframes are so that you can be ready for any last-minute issues that come up. You can trust that Neighborhood Escrow will keep you in the loop – make sure that your lender does as well.
It can be easy to accidentally fall behind on bills right before you buy your home. Why? Because it is chaotic and you have a lot on your mind. This can be doubly true if you are buying and selling at the same time. However, a single late payment could cost you thousands in increased interest rates. Stay on top of your bills to avoid last minute surprises.
