If you are looking for Texas homes for sale you have to avoid making some financial and credit mistakes that could keep you from getting a mortgage or that might even raise your interest rates. Here are some common mistakes first time home hunters make when looking for Texas homes for sale.
New Credit Cards and Debt
In the heat of the moment and in anticipation of working on your new home it might be tempting to apply for a new credit card or line of credit so you are ready to make the improvements you want to your new home. Consider this putting the cart before the horse when house hunting. The more credit cards and lines of credit you have the more worried a lender will be about you not being able to meet mortgage payments. It will also require a credit check which can be a red flag to potential lenders. You also cannot increase your debt as this could affect your debt to income ratio and scare lenders away as well. This includes things such as buying a new car.
Don’t Shut Down Accounts
Keep your finances in order but don’t make any major changes. Keep your current credit cards and bank accounts as you will actually lose points on your credit score by making these changes. Having a higher usage of debt when compared to your credit limit on one card and to your overall credit limit will not look good to potential lenders. You can make changes once you get the loan.
Keep Payments Timely and a Savings Balance
Make sure you are paying all of your debts and bills on time. Never skip a payment as late payments and skipped payments are red flags to new lenders. As well if at all possible try to keep as much in your savings account as possible so you do not appear cash poor to potential lenders.
Stay in your Job
When looking for Texas homes for sale do not change jobs. You want to show you have worked consistently for many years and even if you make a move without skipping a beat between jobs it will look worse on your credit check. You will be expected to present pay stubs and a letter from your current employer and it will be easier to have these ready if you have been working for the same company for a while.
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