What NOT to Do Before Buying a Residence

Buying a home can be an enormous undertaking, but a great number of home buyers don't realize that there are some crucial steps to take before you even start. Or, more accurately, there are some crucial steps NOT to take. What you do just prior to starting the house purchasing process can make a considerable difference. First of all, stay away from big ticket purchases. Large appliances, electronics, vacations, and particularly vehicles - anything that requires you to buy on credit. The issue is that when you go to your loan provider to qualify for a mortgage, they'll have a look at your "debt-to-income" ratio. This is essentially the percentage of your gross monthly income that is spent on debt. Anything that gets paid monthly, including HOA fees, taxes, student loans, insurance, credit cards and, you guessed it, car payments. Having a high percentage of debt to income will make lenders wary of qualifying you for a loan. If you must purchase both, try to purchase the home before the car. Secondly, try to keep all of your money where it is for a few months. Not only does this mean no big-ticket purchases, but also make an effort to avoid moving your money around from one account to another. When you go to qualify for a mortgage, the lender will need to see your source of income, most likely for the last two or three months. Deposits and withdrawals will need to be documented and supplied to them. This means that if you move your money around a lot, you are going to have even more paperwork that you'll need to provide your loan provider. If you are unable to provide this paperwork, you likely won't get qualified. Make it less complicated on both of you and try to keep your paper trail uncomplicated for a few months. Third, if you're thinking about changing careers, try to wait until after you've bought your house. Of course, if you're relocating to a different city or state, you may not have a choice. Just bear in mind the consequences this change may have. Lenders will look at your income over the last two years to help determine your estimated future income. If you're a salaried employee and are transferring to a comparable job with the same (or higher) salary, then this shouldn't be a problem. Your lender should feel comfortable projecting your future income based on your previous job. The same goes for hourly employees, as long as the pay and the hours are comparable. If much of your income is derived from commissions, however, there may be an issue. Even if you're changing to a different company with the same position in the industry, there could be uncertainty in the eyes of the loan provider about your future commission prospects. The worst thing to do would be a drastic career change like, say, going from a salaried position to being self-employed. This will likely make it impossible for lenders to effectively predict your income and they may not be inclined to give you the loan. If you can, buy the home prior to changing jobs. Purchasing a home is a complex process already, you don't want to make it even more complicated through the choices you make before it even begins. Make an effort to avoid these mistakes and you'll be one step closer to (hopefully) a smooth home purchase.

Ready to buy or sell a home? Work with an experience agent for your next Orlando real estate purchase. Visit Lee Cameron's site for the best Central Florida Homes on the market.