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10 "DO NOT DO" rules before buying a home.


Here are 10 things you don’t want to do while you’re in the process of buying a home: 

1. DO NOT change your job and even less decide to become self-employed as you will be required minimum 2 years income taxes. Lenders want income stability so you are less likely to default on the loan.

2. DO NOT change banks or you will be required a lot of information in order to source your deposits.

3. DO NOT buy anything once you have prequalified with your loan officer. Any new purchase will increase your debt-to-income ratios and thus might result in a loan denial.

4. DO NOT buy furniture on credit before closing. EVEN if you are promised no interest payments until the future. Loans have been denied at closing day due to new debts undisclosed at application. Lenders and Banks review your credit again on closing day.

5. DO NOT be late on your credit card payments nor increase its balances. Your loan approval is based on first credit score enquire. Any other credit move might result in loan being denied in the middle of the process.

6. DO NOT make any cash deposits 2 months prior a loan submission!

Limit your deposits preferably from your work related compensation. All deposits need to be sourced and explained or else banks and lenders might not accept your asset account. Your down payment needs to be “sitting” in your account for at least two months prior to application (known as  “seasoning”) so funds don’t just appear “out of nowhere”.

7. DO NOT lie on your loan application. Sounds simple, right? Omitting recent debts not showing on credit or liabilities you have or fudge your income is fraud.

8. DO NOT co-sign a loan for anyone. Even if you’re not the one making the payments on that loan, it will show up on your credit and thus increase your debt-to-income ratio.

9. DO NOT make too many inquiries on your credit. Looking for new credit translates into higher risk for lenders. If your inquiries are related to your mortgage search, it usually doesn’t affect your credit score because the assumption is you are rate shopping. But opening credit accounts within a short period of time represents some risk and your credit could take a hit. It’s probably not a huge factor in your calculating your ability to repay a loan but why take a chance at this juncture?

10. DO NOT spend the money you will need for closing costs. Part of the price of financing a loan is the closing costs and you’ll likely have some responsibility for paying them. Make sure you have enough saved for your share of the obligation.

Don't wait any longer and find out how much you can get Pre-Approved for.

Whether you are considering purchasing or refinancing an existing FHA mortgage loan, Clear Lending can help you. Simply complete our secure and encrypted Pre-Approval Form online and we will contact you right away to review best options for you.

This advertisement is not an offer for an extension of credit. Programs available only to qualified borrowers. Programs subject to change without notice. Underwriting terms and conditions apply. Some restrictions may apply.



Customers Reviews:

  • Nandi Gregori • August 03, 2020

    Would recommend 1000%!!!!! What an experience! Called Joan about buying a home and within 2 months, we looked at A LOT of homes, found one we loved, and closed within 30 days. Before calling Clear lending, I was stressed about the home buying process due to the COVID virus, never thought we would be able to close during a pandemic. Joan made the home buying experience simple and straightforward, answering all questions via phone and WhatsApp, and we also made sure to send all needed documentation in, when requested, to ensure a smooth close... The closing process was stressful due to the anticipation of wanting the process to come to an end, however, that's normal and Joan was readily available answering my never-ending questions. Joan truly cares about his clients and was in my corner throughout the process. Superexcellent home buying experience and a great person to work with. Thanks, Joan/clear lending!!!!

  • Miyumi Denis Llorens • January 12, 2019

    I would like to thank Mr. Joan Gallardo and his team for the information and support given in the complicated process of buying a house for the first time. I thought it would be very difficult and that things would not go as expected but it was all otherwise ... Thanks to the dedication of the staff of the Clear Lending office, everything went better than we had thought .. .. Closing with a very low interest and with input to our favor at the close of our house ... I reiterate our gratitude and I highly recommend this special team ...

  • Marianne Balton • August 20, 2018

    Joan Gallardo and his team are an exceptional group who are devoted to helping others realize their goal of home ownership. Compassionate and conscientious business people are a rare find. As first time home buyer and new to Texas I had no map of the territory. Joan was a reassuring presence through the entire experience and I will always remember and endorse his company for excellence.

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