We came across some exciting tips on how to ensure you have a smooth home buying process, we thought are worth sharing. We summarized them to just 7 commandments to bring context back home. Here is a quick read;

According to the article by Fairway, make sure to follow these 7 commandments of buying a home.

Here is a breakdown:

Commandment 1: Thou shalt not change jobs, become self-employed, or quit your job.

Mortgage lenders look for income stability. They want to know that if they approve you for a home loan, you’ll have the ability to meet your mortgage payments. Changing jobs during your mortgage application stage shows instability and can be a red flag for your lender. It leads to questions about why, could it happen again, and whether your new income will be adequate to enable you to meet your financial obligations.

Commandment 2: Thou shalt not use credit cards excessively or let current accounts fall behind.

Credit cards are part of the debt-to-income ratio that mortgage lenders use to determine the amount of home loan you qualify for. The more debt you have (compared to income), generally means the lower mortgage amount you may qualify for. The lower your long-term debt is, the more confidence underwriters have in your ability to repay, and you may qualify for a higher loan amount.

To ensure you maintain a good ratio we suggest holding off on large purchases especially using your credit card, such as buying furniture for your new home, until after your home loan has closed.

Commandment 3: Thou shalt not buy a car, truck, or van (or you may be living in it!)

As mentioned above, hold off on large purchases until after your home loan closes. Mortgage lenders want to know that you’ll be able to meet both the short (closing costs) and long term financial obligations of your home loan. This is not the time to get an upgrade on your car!

Commandment 4: Thou shalt not spend money you have set aside for closing.

If you’ve put away some money towards closing costs, it might be very tempting to dip into it now and then. Please Don’t! Give yourself the peace of mind of knowing the money you need to close on your home loan will be there when you need it. Trust us, you’ll be happier and less stressed when you exercise this kind of self-control.

Commandment 5: Thou shalt not omit debts or liabilities from your loan application.

Always be upfront about your debts and financial liabilities. Either way, technology makes it pretty easy for mortgage lenders to get the full picture of your finances, whether you disclose everything or not. They will have more confidence in you as a potential borrower if you’re upfront about debt and financial liabilities.

Commandment 6: Thou shalt not change bank accounts.

Qualifying for a home loan generally includes providing your lender with copies of your bank accounts for a period of time (such as the past two years). Avoid changing banks during the home loan process to avoid giving underwriters cause for concern.

Commandment 7: Thou shalt not co-sign a loan for anyone.

It might not occur to you that co-signing a loan or lease for someone reflects on your ability to obtain a mortgage – but it does! You may just be trying to be a good friend by co-signing a loan for your buddy, but to underwriters, this shows up as a financial liability or debt as though it belonged to you. Don’t co-sign onto financial obligations during the home buying process.

Source: https://forneretteteam.com/commandments-buying-home-memes

What are your thoughts on these shall nots? Are you a victim of any of these commandments? Share with us your experience below.

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