When you’re a first time home buyer, the process of applying for a home loan can be stressful. Here is a list of 6 simple tips to help things go smoothly.
- Respond quickly to information requests from your lenders.
- Avoid making changes in your source of income/employment. You are required to demonstrate a stable source of income and a stable employment history in order to qualify for a mortgage.
- Try to avoid purchasing any major items on credit or cash basis. Your debt load and credit rating could be affected by a credit purchase. And your savings could be depleted because of a cash purchase. Similarly, you should avoid co-signing on new loan/credit accounts for your friends or relatives as you’ll be responsible for the debt.
- Avoid other changes in your lifestyle, for example changes in: business ownership, marital status, residence, etc. during the loan process. In case such a change takes place, inform the lender. It’s better that your lender knows about it in advance rather than learning about it when you’re trying to close the loan.
- Make sure to avoid things which could damage your credit record. This includes making late payments on any type of debt – loans, credit cards, mortgage or rent payments. Also note that outstanding liens, judgments, etc., usually must be paid in full in order to complete the mortgage transaction.
- Avoid “shifting” your money around from one bank account to another. A large, unidentified deposit in any of your bank accounts could trigger a red flag and you will have to explain and document it. If applicable, the funds that you will use for completing your loan must be from some acceptable source (i.e. recently documented income, long-term savings or other sources of funding deemed acceptable by mortgage industry standards).
If you’re buying a home in Bend, Oregon you’ll find helpful information about escrow, contracts, inspections and more in our comprehensive guide on Bend, Oregon real estate.