New homebuyers are often overwhelmed in the details that go along with the purchase, especially those that go along with the mortgage. The fact is that until you have closed, there are many issues that can delay your closing. The following are some mortgage tips for new homebuyers that will assist you in finalizing your home purchase:
Documentation
Your lender will need complete documentation of your finances in order to thoroughly evaluate your ability to pay your mortgage. Due to strict guidelines, you must provide bank statements, as well as tax returns and W-2s. You will also need documentation for all assets you own, including any investment accounts. You must be able to explain deposits, even if it was a check from a family member for money owed to you. If you do not have explanations for them, your closing could be held up.
Take Time to Shop Around
Loyalty to your local bank should not take precedents over your mortgage rate. Most often, you will find better finance rates elsewhere. Your loyalty could end up costing you thousands of dollars if you do not take time to shop around with other lenders to get the best rate possible. In 2015, the competition is tough and lenders are doing what they can to gain your business, including offering lower interest rates.
Locked Rate
While shopping around for the best rate, be sure to ask the lender how long they can lock that particular rate in for you. Many lenders are offering a lock-in period between 30 and 60 days, but this will vary from one lender to another.
Making a Job Change
The job of your dreams may come along at the same time that you are waiting on closing on your new house. Until the deal is closed, do not make any job change or it will cause your closing to be postponed. Lenders want to see that you have consistently held the same job for a long time and, even if that dream job comes along, you will want to delay any changes to your employment.
Stop Shopping Before Closing
The biggest mistake you can make before closing is to go shopping for your home and put everything on your credit cards. Lenders are going to view your debt before closing. If they calculate that the debt you owe, which will include your impending mortgage and taxes, is higher than 43 percent of your income, your closing could be postponed until you are able to pay off some of the debt.
If you’re looking for a great Nashville home, we’re here to help. Give us a call at 615.550.5565!