These are some great tips for would be home buyers preparing to buy a home. If your Realtor has experience and has been in the business a while, like I have, I am sure they will have experienced several scenarios and will caution their buyer clients about spending money, especially during the hliday season.
There are so many great reasons why the Holiday season is one of the most celebrated times of the year. Festivities, decorations, family, and food are just some of the best parts to be enjoyed along with friends and family. Whether you're an individual who prefers to sit at home and shop for gifts from behind your computer screen or you look forward to venturing out in to the bustling shopping centers full of kids waiting in line to get their picture taken with Santa Claus. Either way, there's no denying that this is also a marvelous moment for gift giving.
As the retail shops start to see an increase in patrons and profits the real estate market tends to experience the opposite. Between homeowners that are hustling to adorn their houses with lights and ornaments, and others who are busy preparing for parties and guests, purchasing or selling real estate is one of the last activities on the minds of those reveling in the holidays.
However, even though the real estate market tends to see a slow down in activity during the winter doesn't mean there aren't individuals that are in need of buying or selling a home. What if you had a sudden job transfer or perhaps you made the decision to move closer to an aging relative who requires the assistance of a loved one. Maybe you wish to sell your home and move your kids in to a better school district before the new Spring semester begins. There are a multitude of reasons why you could find yourself shopping for a new place to hang your hat right in the middle of arguably the busiest time of year for most families.
If you are one of those who individuals who's shopping list includes a new hat for Uncle Joe, a bicycle for your nephew, and a 4 bedroom single-story house with a 2-car garage and a bonus room for yourself, then you need to be aware that your holiday spending spree could have dire consequences and destroy the chances of getting qualified for a new mortgage. Whether you've just begun your search or you're already under contract to purchase a property, here are three decisions to avoid that can ruin your ability to close on a home:
Applying for New Credit
I know it's tempting to accept the offer you received in the mail for 0% interest and no payments for six-months from that National credit card company. Especially when the wish lists of your family members seem to have doubled in size this year. But applying for any new credit while searching for a home can wipe out your lenders ability to gain a mortgage approval. This includes, but is not limited to, major credit cards, lines of credit, or department store charge cards. Taking on a new line of credit can severely change your debt-to-income ratio and alter other financial factors that play a roll in the loan approval process. Avoid any situation that will require an inquiry in to your credit score.
Making High Dollar Purchases
What if you open the holiday edition of the weekly sales flyer from your favorite furniture store and the couch and love-seat combination that you've been anxiously watching finally went on sale and the savings is phenomenal! You couldn't imagine a better way to celebrate the holidays and your new home by relaxing around a fireplace enveloped in the comfort of your new furniture. To top it off, the flat-screen television that is sure to dazzle the neighbors when they come over for your next gathering is also being discounted to make room for the new years models to arrive. Clearly your lender will understand that these once in a lifetime savings would be foolish to pass up!
I can assure you, a lending institution will seriously scrutinize any purchase that is outside the normal spending habits of your household. Some banks will also require the borrower to keep a certain amount of money on hand throughout the entire lending process. If you spend any of that reserve which is supposed to remain in your account then don't be surprised if the door closes on your chances of being approved for your loan.
Depositing or Transferring Large Amounts of Money
When applying for a mortgage, it's easy to send up red flags with a lender. Any and all aspects of your past and present financial footing will be under a microscope. It's not uncommon for couples or families to have multiple bank accounts in which purchases and deposits are made. Between savings accounts, checking accounts, and business accounts there are many valid reasons why an individual would need to transfer money or make deposits in to each and every bank account in which they have access. Cash gifts and company bonuses can be commonplace at years end.
However, abnormal money transfers or unusually large deposits could send your lending institution in to a frenzy. There are many jobs or small businesses that make large deposits or money transfers each day. As long as you stay within the parameters of normal operating procedures for your company or personal accounts then you shouldn't worry.
If you find yourself in one of these situations and are unsure of how to proceed then talk to your mortgage broker before taking any action. It's always best to play it safe with your credit scores and bank accounts during the entire loan application process. Even the most well intended financial decisions can wreak havoc on a successful loan approval. If you find yourself in need of applying for a new mortgage during the holidays then don't let an unfortunate misstep compromise your chances of moving in to your new home.
If you or someone you know are in need of buying or selling real estate in the Gilbert, Arizona or East Valley areas then contact us today at ZionRealtyAZ.com. Not only will we help you find your next home but we can also recommend outstanding lenders who will assist you in gaining your next mortgage approval.
If you are thinking of buying or selling an home in Maryland give us a call at 410-292-0100 or start your search here and we'll talk about the market conditions and what your home could possibly be worth in today's market place if you are thinking of selling. If you are considering buying a home, there is no better time than now to buy. The tax savings and wealth building alone is worth the plunge into todays market. Remax New Beginnings and I are connected with some of the brightest and best real estate agents in the world and can assist with your move here in Maryland or anywhere in the United States or abroad. Ask me how.
June Piper-Brandon ~ Associate Broker ~ CDPE, CIAS, ePro, MRP
Remax New Beginnings