If you are in the market for a home, then you know that applying for a mortgage sits on the horizon. The process has several steps, but none of them as important as the pre-planning you do to ready your financial and credit situation for the effort. There are a few details you need to handle before you embark on your home buying process, read on so you can be sure to be ready for the tasks ahead.
How long have you been at your current job? Are you considering making a move to something better or new? Well, if you’re home shopping, now is not the time to make a shift in your career path. When you apply for a mortgage loan, your loan officer will need to track a consistent source of income for the past year or so. Ensure a better chance of being approved for your loan by staying put at your current job; make your move after you settle on your home.
Finances and Banking
Reviews of your financial records are a large part of the mortgage application process, so there are quite a few points to take note of when it comes to your banking behaviors. To simplify it, check out the bullets below.
- Don’t deposit cash pre-loan application. Cash is not traceable and tracking your money sources are part of the game. Your loan officer can help guide you how to properly track cash income.
- Don’t change bank accounts. Part of tracing your finances is reviewing banking statements. Consistency with your bank accounts, in this case, is key.
Even more important than traceable, consistent banking processes, when it comes to mortgage loan applications, is you credit history and spending habits. Loan officers use your credit and spending information to support your credibility of loan risk. Be wary of making large purchases that you must finance ahead of applying for your loan, and don’t co-sign loans for anyone else during this time. Both of these actions will lower your credit score. The same goes for applying for new credit cards or closing old, zero-balance cards. Maintaining your credit score is a critical criterion when you are looking to buy a home.
The bottom line is that when you are entering the process of buying a home, err on the side of caution with your job, your spending and your banking habits. By being aware of how to avoid potential pitfalls, you get yourself that much closer to approval for your home loan.