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Buyer DO's
- DO find a Realtor who will represent you in your home purchase, who knows the local market well, who will work with you through out the home buying process and will look out for what’s in your best interest. It is recommended to find a Realtor who will understand your needs, priorities, considerations and preferences very well.
- DO continue to make timely payments on ALL of your financial responsibilities especially on your current mortgage payment. A delinquency will automatically hurt your credit score which may disqualify you for the loan you are applying for. A credit report is often run just prior to closing of your loan.
- DO keep an organized and accurate record of important documentation necessary for your loan application e.g pay stubs, W2s, bank statements etc.
- DO contact your loan officer if you have any questions or concerns about any recent actions that may affect your financial standing or loan qualification. Your loan officer can advise you if it will affect you or not, e.g. car purchase, change of jobs or accepting gift money.
- DO get pre-approved or better yet, pre-qualified for the loan and review your financing options before home shopping and / or signing a contract of offer on a home. It is always a good idea to know how much of a house you can be approved for.
- DO write down your ideal home : priorities, specifications, requirements and preferences e.g. home size, number of rooms, school zoning, yard size, proximity to work and schools, year built, timeframe of closing.
- DO share with your Realtor your preferences so your Realtor can better stream-line your options.
- DO find the right seller. You would want a seller who welcomes home inspections as soon as can be done, who doesn’t push back closing and is able to clear liens on the property. It is good to know what the seller’s back up plan is for a replacement home.
- DO review with your Realtor an effective price offer on a home based on comparables and understand contingencies and time frames in the contract.
- DO compare warranties, structural specs and incentives being offered by Builders for new construction.
- DO a home inspection with an inspector who meets or exceeds ASHI Standards (American Society of Home Inspections) before you close on the property.
- DO acquire a home insurance coverage that adequately protects your investment.
- DO keep your property in good condition, be pro-active in preventive maintenance.
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Buyer DON’Ts
- DON’T go spending free or make big purchases e.g. furniture, appliances, a car. The increase in debt may disqualify you for the loan. Remember that every $5000 of home price is only approximately equivalent to $30 on your monthly mortgage payment, therefore, a car payment of $300 can reduce your approved home purchase eligibility by $50000.00
- DON’T change jobs and/or transfer to a brand new line of business. A new job may involve a probationary period which must be satisfied before that income can be used for qualifying. A lot of loans also require 2 years of history of being in the same line of business.
- DON’T open new trade lines e.g. new credit cards. This would mean running your credit score again and too many inquiries on a given period can hurt your credit score.
- DON’T maximize your existing lines of credit. Ex. If you have a $5000 credit limit on a credit card, try to use only below that limit on a given statement period, preferably up to 50% only.
- DON’T attempt to consolidate bills before consulting with you loan officer.
- DON’T miss out on any bill payment due date.
- DON’T pack or ship important documentation needed for the loan. Always make copies and these documents should be kept available.
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