Home Buying Mistakes

Buying a home may take a lot of preparation and planning. Aside from the actual home search, you may also need to make yourself financially stable. Many aspiring homeowners forget to make themselves look in great shape financially by mismanaging their financial resources. This can get in the way of their application for additional funds from lenders who always look into your financial and credit history to determine if you are qualified. Here are some common mistakes that many people commit that you should be avoiding if you plan on buying a home.

Moving Money Around

When a lender looks into your loan package, one of the things that they will try to learn about is where you will be sourcing your funds for the down payment and closing costs of the home in question. In such cases, you will surely be asked to provide financial statements for the last two or three months on any of your liquid assets. This will usually include your checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, etc.

If the lenders see that you have been moving money between different accounts during that time, the mortgage underwriter will most probably require a complete paper trail of all the withdrawals and deposits that you have made during that span of time. It could get quite tedious on your part as you may be required to produce canceled checks, deposit receipts, and other data. Moving your money around could make it more difficult for the lender to properly document your finances and may think twice about approving your loan.

Changing Jobs

Changing employers will not really affect your ability to qualify for a mortgage loan. But if the loan is to be used for a home purchase, then the effects of changing jobs can be disastrous to your loan application. Changing jobs and the type of employee you are can also affect your situation.

Salaried employees should be so worried about a job change and its effects on a home loan approval. As long as you remain in the same line of work, your home loan approval won't be compromised. But if your type of job depends greatly on commissions and incentives, you should not try to change jobs when you are planning to buy a home.

Changing employers would create a lot of uncertainty on your future earnings since you do not have a stable income on your commissioned-based job. It would be hard for mortgage lenders to determine just how much you will be earning if you change jobs while you are applying for a housing loan.

It is the same thing with part-time workers. Changing jobs will put lenders at a situation where they may not be able to determine how much you will be earning in your new job. What makes such situations critical of your loan approvals is that lenders find it difficult on evaluating your future earning status if you change jobs at the same time that you are applying for a loan. It would be a wise decision to put off for the moment any plans of a job change if you really want to increase your chances of having your housing loan approved.