6 Blunders Homebuyers Make After Pre-Approval

Here are six common mistakes we see homebuyers do that can cost them the home of their dreams.

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If you’ve gotten pre-approved for a mortgage and are ready to start seriously shopping, here are some things we suggest you avoid doing in that time between pre-approval and recording on your house: 

1. Don’t quit your job. If you’re forced to leave your job, let us know right away and talk to your lender. Few things will raise your lender’s eyebrows faster than finding out that you no longer have employment or a steady stream of income. 

2. Don’t buy or lease a vehicle. I lost a house for a guy one time because he was stationed in the lower 48, had to move up to Alaska, and thought it a perfect time to buy a new Dodge Ram pick-up; his loan-to-value ratio spiked, disqualifying him for the loan. We still found him a home, but he missed out on the one he really wanted. 

3. Don’t increase the balances on your credit cards. During this period, it’d be better to just put the cards in a drawer and forget they’re even there.

Keep your Realtor and lender informed about what you’re doing every step of the way.

4. Don’t use money you’ve set aside for your closing cost or your down payment. To avoid temptation, put those funds in an entirely separate account. 

5. Don’t omit any liabilities. Accurately report loan debts and things like child support. Not doing so will only come back to bite you. 

6. Don’t buy furniture or appliances. Prior to moving, it’s easy to become antsy and go out and buy stuff for your new house—focus on actually getting the house first, though. Other large purchases can impact your loan-to-value ratings. 

Keep your Realtor and lender informed about what you’re doing every step of the way. Communication is key. Speaking of which, if you have any questions about the information covered in today’s message, feel free to call or email us. We’d love to help you.

What Should You Know About Online Lenders?

For those of you who are buying a home, you might be tempted to work with an online lender. Here are the pros and cons of doing so.

Looking to buy in Alaska?  Get a full home search
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We’re so busy these days that a lot of us prefer the simplified version of everything. We’d rather text than call and shop online than go to a store, so it makes sense that the next big trend is to use full-service, online mortgage companies.

However, is that the best decision? Here are some pros and cons when it comes to online mortgages:

Con: There’s an increased risk of fraud and scams. Remember, you never need to pay money for a quote or pre-approval. You may have to pay an application fee later on in the process, but be careful who you’re giving your money to.

Pro: Faster and cheaper. Online lenders generally dumb down the process, which is why they’re so popular. They’re fast, easy, and often offer lower interest rates to attract buyers.

Rates with online lenders can be extremely high.

Con: If you use an online lender, you have to be careful with the online forms. Since there is nobody there to answer your questions, it can be easy to misunderstand the questions and the payments you will be making. It could also affect your approval later on.

Pro: They can usually help people with lower credit scores. You might be able to qualify for a loan with an online lender that you couldn’t qualify for with a big bank.

Con: Although they approve lower credit scores, it doesn’t necessarily mean you can afford to buy a home. Their interest rates can be extremely high. 

One thing an online lender can’t do is give you the same advice that an in-person lender can. That’s why we suggest that all of our clients work with one. A lender can help you improve your credit score, understand your budget, and more. We’d be happy to connect you with a lender that we trust.

If you have any other questions, feel free to reach out via phone or email. We look forward to hearing from you.