What Not To Do Before Buying A New Home

Buying a new home is no less than a herculean task and most of the times people do

not realise that needs proper attention and consideration even before you actually begin the hunt for a home. Rather there some things which should be avoided at all costs. It can really matter a lot what all you do before beginning the search for a home.

The first and most important thing not to do is- a big ticket purchase. A lender always asks for a debt-to-income ratio. This, in simple terms, is the percentage of your gross monthly income that is spent on debt. This includes taxes, HOA fees, insurance, credit cards and car payments. If you have a high percentage of debt to income, lenders will shy away from giving you a loan. In case you need to buy both the car and home as well, try to buy the home first.

It is important to try to keep all your money where it is for a few months. This means no big ticket purchases and also do not even move your money from one account to another. When you go looking for a loan, the lender would wan to look for your sources of funds for the last two or three months. You will have to provide your deposit/withdrawal documents to the lender. So, if you move your money around too mush, you will be stuck with a lot of paper work. And without providing the required documents you can not expect to get the loan.

Do not change your job, if you are thinking to, until you purchase your new home. In case you are moving to a new city you do not have a choice. This job change can affect your purchase. Lenders look at your last two years' income to determine your estimated future income. It should not be a problem if you are a salaried employee and moving to a higher or same salaried job. Same is the case with hourly employees. If most of your income is derived from commission, this may create an issue. There is going to be an uncertainty in the lender's mind about your future commission prospects even if you move to a different company retaining your old position and industry. A sudden career change can prove to be a disaster for you. This will make lenders shy away from giving you a loan.

It is not easy to buy a home. It involves a lot of issues to be taken care of. Try to avoid the above mentioned mistakes to make your purchase easier.

by: minax

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