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Wendy Gimpel

Do’s and Don’ts When Buying a New House

You’re ready to buy a new house and have your ideal budget and location in mind, but are you truly prepared to buy your dream home? Before you go any further in the home-buying process, here are a few crucial do’s and don’ts to remember when purchasing a new home.

DO Check Your Credit and Credit Report

You might think that your credit is excellent, but there may be some surprises in your credit report. Remember that your credit score is negatively impacted when there are excessive unsolicited credit inquiries from different vendors. Opt out of these offers by calling the 800 number in your credit reports. To get a free copy of your credit report, visit annualcreditreport.com.

DO Continue Paying Your Other Loans and Credit Cards

When buying a house, your FICO score is crucial. Your score affects your rate, the cost of mortgage and hazard insurance, and the loan approval. Ensure you keep paying your credit card bills regularly and stay above any other car and current loans. Don’t open new credit cards or get cash advances from your credit cards or other lines of credit. These can all affect your FICO score.

DO Get Pre-Approval for Your Loan

Getting pre-approval ensures you know how much your actual budget is when buying a house. It can also speed up the loan process when you find the home you want to purchase. Keep in mind that federal regulations restrict what a lender can send to an unqualified applicant. 

If there’s no pre-approval and the application is received by the lender or bank at the same time as the contract, the lender can’t send the list of items that need to be obtained and reviewed until after loan disclosures have been sent and signed. This list includes pay stubs, bank statements, and tax returns. Lacking pre-approval can delay the process from one to three days.

DON’T Use Credit for Major Purchases

Do not make any other major purchases until after you’ve closed on your new home. Using your existing credit cards for minor expenses, such as groceries or some shopping (don’t go luxury shopping just yet), will typically not affect your home buying. However, opening a new loan for something big, like a car, can delay closing. Consult with your lender before purchasing anything large before closing on your new home. 

DON’T Change Jobs Before Closing on Your New Home

You may not realize that changing your jobs during the home-buying process will likely delay the closing of your dream home. Even if your new salary is higher, most investors require thirty full days of paystubs, so the whole process will be delayed. Note that retirement can even have a more significant effect on closing on a home. Remember that your current job is part of what qualifies you to get a loan for your new home in the first place. Don’t change your job or make any career moves until after everything is settled.

DO Expect A Final Credit Check Before Loan Closing

All lenders will do a final credit check before closing your home purchase. Even with pre-approval, lenders must monitor the credit report, add any new debts, and request information from the borrower. Even a well-qualified borrower who takes on new debt, or even a husband issuing a check to his wife, must go through a final review if new credit is obtained near the closing date.

The period between pre-approval and loan closing should be a “quiet period.” Don’t make any major changes in debt, change your job, residence, or anything else major that can affect your credit. After you close on your new home, feel free to make other major purchases and live your life without restrictions!

Contact Realtor Wendy Gimpel Today!

Wendy Gimpel is an experienced real estate agent and broker in the Stillwater, MN area who can help you sell your current home and find the home of your dreams. Wendy understands closings and the stress that comes with them. If you need help during the home-buying process, give Wendy a call.

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