If you are planning to buy a property within the next year, there are specific things that you should avoid doing as they may hinder your financing options. Below are 5 mistakes to avoid before purchasing real estate in Pennsauken.
5 Mistakes To Avoid Before Purchasing Real Estate In Pennsauken
Large Expenses
Mortgage companies evaluate the percentage of your debt to your overall income. Making large purchases either on your credit cards or with new loans can dramatically change that ratio. In general, the higher your debt, the less you will qualify for on a mortgage. This is particularly important after you have found a property and have initiated the mortgage process. Lenders will re-run your credit report immediately prior to final approval to ensure that things have not changed. If you obtained new debts, this can result in you not being able to purchase the property.
Moving Employment
As part of the mortgage process, lenders review your past and current earnings to evaluate your ability to make payments. A solid history in earnings is essential. Moving employment prior to or during the mortgage process can cause problems with qualifying for a mortgage, particularly if the new job is in a different field or at a lower pay. During the loan process, it will also create delays while the new job is verified.
Moving Banks
Mortgage processors typically review your bank account history over the last several months. Moving your money to a different institution may lead to issues. It is best to keep money in the same location until after the mortgage closes.
Cash Transactions
Most types of mortgages mandate that you use a specific amount of your own money for the down payment or closing fees. Banks verify this by reviewing bank statements. Any cash transactions are carefully scrutinized. You may be asked to provide details on the source of those deposits.
Shutting Down Accounts
While preparing to purchase a property, you may try to diligently pay down debts. Prior to doing this, think about consulting with a mortgage professional on whether it is required based on your financial situation. If you do pay off debts, do not terminate the accounts as this will drop your credit rating. It is better to leave the accounts open without a balance.
Additional Guidance on 5 Mistakes To Avoid Before Purchasing Real Estate In Pennsauken
The above 5 mistakes to avoid before purchasing real estate in Pennsauken covers only the most common mistakes examples. Contact Diana Escobar-Wachter with Access Abstract Corporation at 610-461-2910 or wachterd@accessabstract.com for additional information on this and other related topics.
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