Do's and Don'ts
What to Know Before Buying a Home
DO get pre-approved – or better, PYT certified! A pre-approval is issued after you have completed a full application and provided supporting documentation, including tax returns and pay stubs, and will give you an accurate estimate of your monthly payment. That said, we’ll also back your loan with “Protect Your Transaction”, our proprietary assurance of up to $15K that your loan will close whenever possible. Speak with your loan officer for additional details!
DO pay close attention to your credit. Know your score, and avoid unnecessary credit pulls. Additionally, if you are in need of credit repair resources, we are happy to provide a referral.
DO pay your bills on time. A single “30-day late” payment on a loan or credit card can destroy your mortgage qualification.
DO keep your personal financial documents including pay stubs, tax returns, bank statements, proof of earnest money deposit and provide when requested, as they will be required prior to closing.
DO keep your lender informed of any major life changes including marital status, change in household size or change in household income.
DO secure a homeowner’s insurance policy. A copy must be provided to your loan team prior to your loan being clear to close.
DO pay off debt, or keep it paid down. Debt-to-income (DTI) is an important ratio considered throughout the loan process. Minimizing unnecessary debt is a critical, although it’s generally okay to keep using credit cards as you normally would.
DO keep open dialog with your loan team. It may seem okay to keep life events such as job gaps or foreclosures to yourself, but these items will likely be discovered as your loan progresses toward closing. Be honest and upfront; many current homeowners do not have a perfect financial history!
DO start a savings plan. Your loan may require reserves at the time of closing, or you may want to start allocating funds for new furnishings or future upgrades.
DO stay in contact with your loan team. You’ll be kept up to date on the status of your loan, and you may be asked for additional documents throughout the loan process. In these instances, please fulfill requests as soon as possible. We won’t ask for anything that isn’t absolutely necessary, and delays may compromise your closing.
DON'T shop for houses prematurely. It’s tempting to take a look at the Open House down the street, or look for homes online. However, it can also be disappointing to set your sights on homes outside your price range or beyond your monthly comfort level. Your loan officer will work diligently to find the best loan product for your specific needs in a timely manner.
DON'T close any revolving credit accounts, even if they have a $0 balance. This could negatively affect your credit score as it will change your percentage of available credit and payment history.
DON'T enter any deferred payment plans or co-sign on other loans. Similar to opening new credit, deferred plans to purchase furnishings or other supplies may harm your loan status. Even if payments won’t start until after your closing, they will likely appear on your credit report as debt and affect your debt-to-income ratio and credit score. Similarly, co-signing on someone else’s loan will jeopardize the loan amount for which you will qualify.
DON'T acquire any Non-Sufficient Funds (NSF) fees from your bank. Depending on the timeline of your loan, you may be asked to provide bank statements covering an extended period. Just one NSF transaction may harm the status of your loan.
DON'T deposit or withdraw large amounts of money into your accounts, if possible. Large transactions will likely need to be sourced. While not detrimental, continued sourcing of these amounts adds steps to the loan process.
DON'T change jobs or become self-employed without discussing it with your lender. Your loan approval is based in part on pay stubs you provide. Even positive changes in income can change the status of your loan.
DON'T accept rates you see published online at face value. Often times, rates published online are based on hypothetical income values and credit score, or have higher back end fees attached. Feel free to ask questions before locking your rate.
DON'T let other people’s opinions sway your decisions. Friends and family usually have great intentions, but multiple opinions can muddy the water and may not be specific to your situation. Your loan team is here to help!
DON'T let stress get the best of you during the loan process. Buying a home is the largest financial decision many people will make in their lifetime. Rest assured you are in qualified and reputable hands, and don’t hesitate to ask questions along the way.
DON'T think you have to navigate the road alone! Your loan team, real estate agent and other home professionals are here to help and happy to answer any questions that arise.