For 25 I’ve been watching new home buyers make the same mistakes over and over. If you are going to buy and use financing via a new mortgage there are several items you need to keep in mind and/or complete to ensure a smooth funding. This is not a complete list by any stretch but I can tell you this list will save you somewhere along the line.
1. Get Approved. Not Pre-Qualified. There is a huge difference. It is possible to obtain a full underwriter (human) issued approval, before you find the home of your dreams. It’s called a TBD as in To Be Determined, as in, you will determine what the address is after you get approved. Your Loan Officer should know this is an option. Getting pre approved merely denotes an application has been reviewed and maybe automated underwriting has issued an approval. Full approval helps you understand what you truly qualify for.
2. When you are shopping for, in escrow for, or getting ready to close.. DO NOT ever, UNDER any circumstance buy anything new on credit, don’t apply for that new stove or refrigerator. don’t finance carpet. If anyone runs your credit or even worse extends you credit, you may find your loan approval has been reversed. And yes, I’ve tight deals get cancelled over very small amounts of new credit.
3. Get your items to your lender as quickly as possible. Turnaround is everything in our business. And turnaround times apply to you buyers as well. When you are asked by your lender, escrow officer, processor etc., make sure you respond with the items they need as quickly as possible. You’ll be doing yourself a favor!
4. Read what is being sent to you. Read your contract carefully and review your loan paperwork in detail. The rules these days dictate that lender and brokers disclose terms much clearer and leave little room for error. This step will avoid last-minute confusion about your loan terms and leave you with a bad taste in your mouth because you didn’t keep yourself informed.