The Ten Commandment Of Buying A Home In Lexington Kentucky

The Ten Commandment Of Buying A Home In Lexington Kentucky

I bet you didn’t know that there were so many things you could do that would prevent you from buying a home!  Let’s look at the 10 commandments and why they matter:

1. Thou Shalt Not Change Jobs, Become Self Employed or Quit Your Job

This one is very important!  If you change careers and industry you might have to wait up to two years before you are eligible for a loan again.  Lender’s have very strict guidelines around employment.  It is always best to consult your loan officer before making a job decision.

2. Thou Shalt Not Buy A Car, Truck or Van (or you may be living in it!)

Seriously, don’t buy anything that requires credit!  When you buy a new vehicle you will have an inquiry into your credit (see #7) which could lower your credit score.  Also, the new car payment will reduce the cash flow you have available to make your mortgage payment.  This reduced cash flow could prevent you from qualifying for the loan.

3. Thou Shalt Not Use Credit Cards Excessively or Let Current Accounts Fall Behind

Many lenders will perform another credit check close to closing.  If you run up large balances or neglect to make a payment on time your credit score can be impacted negatively.  This drop in credit score could mean you qualify for a worse rate or not qualify for the loan at all!

4. Thou Shalt Not Spend Money You Have Set Aside For Closing

This one is pretty simple.  Your loan officer will tell you how much you need for closing.  Have it set aside in a bank account and don’t touch it.

5. Thou Shalt Not Omit Debts or Liabilities From Your Loan Application

When applying for your loan make sure you are upfront and honest with the loan officer.  They will find debts, bankruptcies, collections etc.  Their goal is to help you and they need complete information to see what options they have available.  Being dishonest will just make the process more difficult.

6. Thou Shalt Not Buy Furniture on Credit

This is similar to #2 but it happens much more frequently.  Folks get excited about their new home and want to buy new furniture to have it delivered on move in day.  DON’T DO IT.  Just wait until after the closing.  The credit inquiries and the new payment could disqualify you from purchasing your new home.

7. Thou Shalt Not Originate Any Inquiries Into Your Credit

If it requires your social security number stop immediately and walk away.  While credit inquiries only have a small impact on your credit score (1-5 points) lenders have very strict rules for who they will lend to.  A common threshold is 620.  If you have a 621 and have a credit pull that pushes you to 619 you just disqualified yourself for the loan.  Even if you aren’t close to the approval line these thresholds apply to rates.  You could easily push yourself into a higher rate and require more funds to close.

8. Thou Shalt Not Make Large Deposits Without Checking With Your Loan Officer First

Are you laundering money?  Probably not.  However, the federal government wants to make sure and will require you to “source” any large deposits within the last 60 days.  This also applies to gift funds that will be used for your down payment.  So before you make any deposits aside from normal income from your employer talk to your loan officer first or you may not be able to close your loan.

9. Thou Shalt Not Change Banks

This may not be deal killer but it can be a huge pain in the neck.  When you move money around you will need to “source” the funds which means write a bunch of explanation letters and submit bank statements and transfers.  It can delay closing for weeks and your contract could expire.  Just wait until after the closing.

10. Thou Shalt Not Co-Sign for Anyone 

This is pretty much a rule at any time regardless of buying a house.  However, when you co sign the payment, even though you aren’t paying it, will be deducted from your income.  This will mean you don’t have as much cash flow available for the mortgage payment and may not qualify.

Are you thinking about buying your own home?  Get our free Home Buyer Seminar.  It is 4 short video’s and will explain everything you need to know about buying a home.

Morgan Franklin

(859) 576-0801

10 commandments of buying a home Lexington Kentucky

Morgan Franklin Headshot
Phone: 859-576-0801
Dated: April 4th 2017
Views: 7
About Morgan: Hi, I’m Morgan Franklin and I am a Realtor in Lexington Kentucky. I have lived here for over 25 ...

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