Boca Raton 5 Common Credit Mistakes

If you are thinking about purchasing a property in the near future, there are specific mistakes that you should avoid as they can affect your financing options. Below are Boca Raton 5 common credit mistakes.

Boca Raton 5 Common Credit Mistakes

Major Purchases

Mortgage companies review the percentage of your debt compared to your income. Making large purchases on either your credit cards or with new loans may dramatically shift that ratio. Typically, the higher your debt, the lower your mortgage qualification. This is even more important after you have completed your official mortgage application. Lenders may re-check your credit report just before settlement to ensure that things have not changed. If you acquired additional debts, this can result in you not being able to purchase the home.

Switching Jobs

As part of the underwriting process, mortgage companies look at your past and present employment to evaluate your ability to make payments. Consistency in earnings is very important. Moving jobs before or during the loan process may create difficulties with qualifying for a loan, particularly if the new job is in a separate line of work or at a lower pay. During the loan process, it will also lead to delays while the new employment is verified.

Switching Banks

Loan processors generally evaluate your bank account statements over the last several months. Moving funds to a different bank may cause delays. It is advisable to leave money in the current location until after the mortgage closes.

Cash Deposits

Most types of loans mandate that you use a certain amount of personal funds for the down payment and/or closing fees. Banks confirm this by looking through bank statements. Any cash deposits are closely reviewed. You may be asked to verify the source of cash deposits.

Shutting Down Accounts

While getting ready to buy a property, you may try to pay down credit cards. Prior to doing this, think about consulting with a mortgage consultant on whether it is necessary based on your financial figures. If you do pay off bills, do not close the accounts as this may reduce your credit rating. It may be best to keep the accounts open with no balance.

Additional Advice on Boca Raton 5 Common Credit Mistakes

The above Boca Raton 5 common credit mistakes is just the most common mistakes. As a local real estate consultant, I can provide you with a list of local lenders in the Boca Raton area. You may reach me, Sonny Solomon, at The Keyes Company via phone at 561-247-1047 or email at sonny@sonnysolomon.com.