We have talked about this a few times on the blog, but in light of the new First Time Home Buyers HOME partnership program, here are a few steps to follow once you are pre-approved or approved for financing.
- Don’t Apply for New Credit
- The lender will calculate your debt based on the amount of income you have. If you are applying for new credit, the assumption is you will use this credit and it will affect your debt to income ratio.
- Don’t Close Any Old Credit Accounts
- Don’t move your money around
- Keep your money (down payment) in one place during the mortgage process! Once you have settled with the bank on the contract of the mortgage, the lender will require bank statements showing your saved money (down payment). They look at the history along with the balance. If there are unusual deposits, you will need to explain where the money came from. This is where you need to ensure that you have a proper paper trail if you are moving funds around!
- Minimize your Large purchases
- The lender always looks at your debt to income ratio. Keep your large purchases to a minimum to not risk going over the maximum amount of debt compared to your income. (This means hold off on buying that new car until you have moved into your new property!)
- Always make your payments ON TIME
- Schedule your payments to go out automatically (automatic debit) to make sure you never miss a payment.
- Stay with your current employer. In other words, don’t start a new job!
- Keep your Savings in check.
Following these steps when you are going through the pre-approval and approval process will help to keep things on track and moving forward!