What Not To Do When Applying for First Time Buyer Loan in 2017
First-Time Home Buyer Mistakes
First time home buying in Los Angeles, Long Beach, Inglewood, Downey and any of the surrounding cities in 2017 can be one of the most exciting ventures a 1st time home buyer can embark upon in life! However, in their growing excitement, first time buyers can oftentimes be remiss in avoiding some of the most common mistakes made prior to filling out a loan application or obtaining final loan approval while in escrow.
Here are just a few of the many pitfalls to avoid:
- DON'T pack, store or ship crucial documentation that may be needed to process a loan application i.e. tax returns, divorce decrees, child support documents, W-2, resolved disputes, zero balances on paid off accounts, etc. Obtaining certified copies may create massive delays that can cost a buyer money and sometimes the house.
- DON'T run your credit report yourself. Many DIY buyers do this only for the inquiry to potentially show up on the lender's credit report as a random inquiry or a previously undisclosed debt as opposed to a mortgage lender's inquiry that is easily documented as being related to a home purchase.
- DON'T buy or lease an auto. The new debt and potential monthly payment could greatly drop a buyer's pre-approval amount or create a debt-ratio that prevents the buyer from qualifying for a loan at that time.
- DON'T move money and assets from one financial institution or bank to another. It is oftentimes considered "new money" in the account and the source of where that money came from will need to be explained with supporting documentation. It can also slow down the escrow process creating a "lack of performance" situation on the buyer side, potentially costing the buyer a per diem charge when applicable.
- DON'T change jobs. A new job may involve a probation period which in some cases must be completed prior to lender being able to fully qualify buyer. When the new job is in a different industry than previous job, this too can raise a flag to lender in some cases.
- DON'T buy new furniture or appliances. One of the common mistakes excited first time home buyers make is dipping into funds or creating new debt that disqualifies them.
- DON'T open any revolving accounts or utility accounts that require SS# or that will run your credit to turn on the services. NO credit inquiries outside of your mortgage lender prior to close of escrow if at all possible.
Once you are serious about buying a home for the first-time, please call us at 310-508-4354 or fill out a mortgage pre-qualification request to be matched with a professional mortgage loan specialist who has experience working with first time home buyers and their programs.
Andi Grant, Realtor