Helpful Hints for Getting a Mortgage Loan

Helpful Hints for Getting a Mortgage Loan

Moving Money Around

The person who actually approves your loan will be looking at all your money for at least two-three months. They will be looking at your checking accounts, savings, deposit slips, stocks, 401k and retirement accounts. When you move money around from these, it makes it harder for them to document, which means they will be asking you for a lot more paperwork concerning large deposits or withdrawals.

So, unless advised to do so by your loan officer, don’t move your money around or change banks.

Changing Jobs

When it comes to getting a house loan, normally changing jobs doesn’t really affect your qualifications, but for others it can be quite detrimental. If you are going from one salary job with no commissions or bonuses to another, it shouldn’t be a problem. The same goes for a full-time hourly job.

However, if most of your income comes from commissions, changing jobs is not recommended. Mortgage lenders average your last two years to calculate your income. So, if you change jobs before you buy a house, the lenders can’t predict your future earnings because there isn’t a past income they can base it off.

If a new job will supply you with bonuses that will make up the majority of your income, you may want to put it off. Lenders rarely add in the prospect of future bonuses unless it’s the same job you already had for two years and have already received similar bonuses. Don’t risk losing that two-year track record.

If you’re a part-time employee and your hours fluctuate each week, don’t change jobs. The lender can’t predict how many hours you’re going to work at your new job, but he could average out the earnings from the last two years.

Over-time follows the same line as bonuses. Since each job pays differently for overtime, the lender can’t determine the income you would receive if you change jobs. However, they can calculate your over-time to a monthly average over the last two years of your current job.

Do not think of going to self-employment if you’re thinking of buying a house! Buy the house first! As you might have guessed, lenders like for people to have a two-year track record for employment. When you are self-employed, you have a lot of write offs on your taxes that can minimize your income to buy a home.

No Large Purchases

Don’t dig yourself further into debt, whether you’re buying vacations, weddings, jewelry, etc. And of course, do not buy a car.

When you have a growing income, you may feel so inclined as to spoil yourself; most specifically a new car. However, this debt and car payment can be the determining factor when trying to qualify for a house. Lenders look at your debt-to-income ratio, which is the amount of your income that you spend on debt. This includes your monthly living costs. Your living costs can be your consumer debt, credit cards, loans, and especially car payments.

To put it simply, you will qualify for less than if you did not have a car payment.

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