Thinking about buying your first home in Holly Hills, but not sure if you’re crossing all your T’s
and dotting all your I’s
? The purchase of a home is exciting. But as any mortgage professional knows, first-time home buyers often end up making errors that can be avoided. From credit hassles to money transfers to communication failures, check out a complete list of top mistakes made by Colorado home buyers
outlined in The Denver Post
. And in the mean time, here are a few rules to follow to make your first home purchase a positive experience:
- Get a quick prequalification first – As much as you may be chomping at the bit to find a house, falling in love with one you can’t afford is no fun. Instead of searching for homes online or driving around neighborhoods, your time is better spent by first having a 15-minute phone call to discuss your credit, income, debts, and down payment so that you know what you can qualify for.
- Review your credit 2 to 3 months before you want to buy – Errors on credit reports happen all the time, and while some may be insignificant, others can really hamper a real estate deal. Pull a professional, FICO-based credit report a few months before you buy so that you have time to correct any errors you find.
- Leave credit card accounts open – Pay them down to a $0 balance if you can, but don’t close them completely. Closing credit card accounts can affect your FICO score in a negative way.
Money in the Bank
- Put off big purchases – You may have heard that buying a car right before you buy a home is a bad idea, and it’s true. Making any large purchase can 1) lower your FICO score by showing recent debt, 2) increase your debt-to-income ratio which in turn lowers the price of the home for which you can qualify, and 3) requires even more paperwork to explain and document the purchase(s). So it behooves you to put off a big expense until after you buy your home.
- Don’t move money between accounts – While this may seem counterintuitive, transferring funds between accounts is actually a red flag for underwriters. It gives the appearance that you may be trying to double-count the money you have available for a down payment. If you plan to move any money around, it’s always best to speak to your loan officer first.
- Deposit “gift” funds wisely – The same is true for depositing a large sum of money, or a “gift,” into your account(s). Again, alerting your loan officer first lets them get you into a program that fully allows gift funds and reveals it to the lender. Without properly notifying your loan officer of a potential gift, the deal could fall through.
When it’s time for you to buy in Holly Hills, look to the real estate experts at Elevation Realty to help you find the perfect home. Contact us
for more information or to learn about Denver neightborhood market trends