I am pre-approved now what??

Getting pre-approved and going house shopping is one of the most exciting parts about purchasing a home.

But there are somethings you need to be aware of....

What not to do when you get pre-approved and are in the process of buying a house!!

• Buy a new car- it is easier to get approved for a vehicle than a house.

• Using your closing costs or down payment money

• Co-signing for someone

• Maxing out your credit cards- use 80% rule (This rule is talked about in a different blog)
  

• Do any credit searches or allow anyone else to do credit searches

• Make an large deposits

• Quit your job or lower your hours

• Move to another employment

What you do after you take possession of your house is completely up to you. However by not following the dos and dont's on getting a mortgage it could have catastrophic problems. 

1. It is always easier to purchase a new vehicle than a house that is why I advise my client’s to not purchase a new vehicle while they are looking for a house or before they move in. Unless you purchase the vehicle in cash (but don’t use the cash that is set aside for your down payment or closing costs.) you should not be buying a new car while going through this process.

2. Don’t use your money for your down payment and closing costs. Even though we have already proved you have the funds and seeing that much money in your bank account might be burning a hole in your pocket don’t spend it, as the lawyers will ask you to bring all of that money to them when you sign the documents. 

3. Co-signing for someone else while in the process of buying your own property is a bad idea for many reasons 1) your score will decrease which could lead to you no longer qualifying for the mortgage. 2) We have to use that new debt even if it isn’t yours as part of your debt when we calculate what purchase price you can afford.

Some lenders will pull your credit closer to when you take possession to confirm that you have not taken out any new credit cards and that your debt hasn’t increased, as it could lead to you no longer qualifying for a mortgage. 

4. Making large deposits in your bank account can throw some red flags, if you have to deposit the large deposit which is normally anything over $2,000 make sure you are able to prove where that money came from. 

5.When calculating your qualifying amount for your mortgage I take 3 things into consideration

Debt

Credit Score

Income

We have already spoke about debt & credit score so that leaves us with income. The bank needs to confirm that you make enough to pay your mortgage, property taxes, utilities, credit cards, loans, etc. So you want to make sure you don’t quit your job, lower your hours, or move to another employment while you are in the process of buying a home or pre-approved. 

There are some exceptions to moving employment or a decrease in hours so make sure to speak with your mortgage broker, or feel free to message me and I can look at your situation as well.