One of the first steps of buying a house is choosing a real estate agent to work with, and your agent is likely to recommend getting preapproved for a mortgage loan before you start viewing potential homes to buy. A preapproval from a lender tells you, the agent, and home sellers that you are qualified to buy a house, and it states the maximum amount you can borrow. This preapproval does not guarantee a home loan, though. If you do certain things after getting preapproved, it could eliminate your ability to get a loan—here are some of the main things to avoid as you look for a house to buy.
Making a big purchase
When you make a big purchase, it can affect two main things. The first thing it can affect is your credit. If you needed a loan to buy the big item, the lender would have performed a hard inquiry on your credit, and this is something that can reduce your credit score. The other effect this can have is increasing your debt-to-income ratio. If the big purchase will require payments each month, this could make your financial situation look less favorable to your lender.
Failing to pay your bills on time
Anything that would harm your credit is a bad thing to do after you are preapproved for a loan to buy a house, and failing to pay your bills on time is just one way to lower your credit score. Once you are preapproved, you will need to make sure you pay every bill on time. By doing this, you can keep your credit score as high as possible, and this will improve your chances of turning your preapproval into an actual approval.
Changing jobs after you are preapproved is also a major thing to avoid. Lenders are very cautious when it comes to offering loans, and they take a person's job and income very seriously. Most lenders look to ensure that a person has been steadily employed with the same job for the last two years. Changing jobs will ruin this requirement, especially if you switch from one field to another. Switching jobs within the same field is not viewed as negatively.
Once you are preapproved, it is vital to keep your employment and income the same as it was when the lender reviewed your application and financial information. In addition, it's also vital to keep your credit score the same or higher. If you are preapproved for a mortgage and want to buy a house quickly, visit a real estate agency today.