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Considering buying a new home? Get ready for an exciting time – the process of buying a home is a big adventure for most people. Of course, the best part is walking in the front door of a new house that you get to call your own!

At 1st United Mortgage, we love working with clients walking through this journey, whether they are first time home homebuyers or veterans looking to use their VA Home Loan Benefit again.

Since most of the buyers we work with need a loan, we try to help them get ready by sharing information about the mortgage process. That includes a few don’ts as well.

Here are the top 7 mistakes to avoid during the mortgage process.

1. Don’t Quit Your Job or Go on Leave

Having a steady job is one of the most important criteria when applying for a loan. The lender will ask for year-to-date paycheck stubs, your W-2 and copies of your taxes. They will verify your employment when you apply and also right before closing. They want to make sure you still have the same job and that you are not on any type of short-term or long-term leave.

2. Don’t Make Large Purchases

The lender requires your savings, checking and other account statements. They want to ensure you have enough money for the down-payment on your loan and enough left in the bank to support buying a home.

Lenders also require your credit card, student loan and other loan statements to review your debt-to-income ratio. This is to verify you haven’t borrowed too much. Making large purchases before your loan closes, such as a car, will change how much money you have in your accounts or make your debt-to-income ratio higher.

3. Don’t Co-sign For Someone Else

Don’t co-sign for a family member or friend when you are going through the process of getting a mortgage. When you cosign for someone else (such as for a car, student loan, credit card or apartment lease) you are promising to pay their debt if they stop making payments. Again, this increases your debt-to-income ratio.

4. Don’t Make Late Payments

It’s especially important to pay your rent, car, credit cards, student loan and any other payments on time. This is true at any point as paying late lowers your credit score. However, it is vital that you make payments on time during the home loan process. Your lender will look at your credit report and score when you apply for the loan and also right before closing. You don’t want your credit score to go down or you might not be able to close.

5. Don’t Buy a House With a Mortgage Bigger Than You Can Afford

When you get pre-approved for a home, the lender provides the maximum price for which you are approved. It can be incredibly tempting to buy a home at that price range. However, try to purchase a home for less so you are more comfortable with your new obligations. The last thing you want is to become “house poor” and struggle each month with your other obligations or discretionary spending.

6. Don’t Buy a House Too Small

Not to confuse you too much, but it’s equally important to buy a space with your future in mind. If you purchase a house that’s too small and far less than you can afford, you may wish you purchased a larger one within just a few years. Though that can work out fine, it does mean spending extra money on closing costs for selling your house to upgrade to a larger one.

7. Don’t Purchase the House if the Home Inspection Reveals Deal-Breakers

There is nothing more heartbreaking than falling in love with a money pit. If your home inspection reveals major defects that the seller won’t remedy, cancel the contract. There will always be another home out there for you if it’s meant to be. Here’s an overview of what’s considered a dealbreaker (and what’s not).

Avoid these mistakes when going through the mortgage process and it should be smooth sailing to approval.

If you are a Veteran or active member of the Armed Forces and would like to know more about the unique approval conditions of a VA home loan, contact us today and we will walk you through the entire process.

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