Things a first time homebuyer should NOT Do before or during your home purchase process
Here is a short list of "THINGS NOT TO DO" when you are a first time homebuyer getting ready to apply for a Mortgage Loan with down payment assistance. This is EXTREMELY IMPORTANT PLEASE READ CAREFULLY!
1) Do NOT finance any other large purchases proceeding your home financing. That additional debt will affect your (back-end) Debt to Income Ratio and can prevent you from qualifying for a home. It will most certainly reduce the amount of money you can Borrow for a home.
2) Do NOT apply for credit anywhere until the home transaction is Closed. If you do, your credit score may go down short term and the Underwriter will ask you for a letter explaining why you applied for additional credit.
3) Any amount financed outside of a mortgage will decrease the amount of money you can borrow for a mortgage. Examples: No furniture credit purchases, no car purchases, no boat purchases, no debt consolidation loans, no additional credit cards or lines of credit applications.
4) Do NOT put any “one time” or unusual deposits into your bank account except for Payroll deposits. If you do, you will be asked to document in verifiable detail where those deposits came from and why they are in that bank account. Those additional deposits may prevent you from qualifying for a down payment assistance loan. The Sponsoring entity may say that they consider that one deposit as ongoing income. Yes that happens all the time!
5) Do NOT make any payments on collections unless you discuss it with your Approved Down Payment Assistance Loan Officer. If you do, it may (probably) lower your credit score in the short term.
If you can keep from doing the above actions, your experience will be a relatively easy and quick path to Home Ownership!
If you have any questions, please CONTACT US. We'd be glad to help.