Next Steps After Being Pre-Approved To Buy A Home In Ohio

Your Mortgage Guy Rodney Reynolds with Ruoff Mortgage

Hello, this is RR, your mortgage guy. Now that we’ve established the differences between a pre-approval versus a pre-qualification, what’s the next step that happens after you get pre-approved?

Well, today, I will share a dos and don’ts list once being pre-approved to buy a home with you.

Dos and Don’ts Once Being Pre-Approved To Buy A Home In Ohio

Once you’re pre-approved, here are some things that you should do.

Continue to make all your monthly payments to all your creditors, whether it be installment debts, revolving debts, or student loans. Continue to pay everybody on time.

Also, keep your job if there’s a potential job offer that comes along. If you decide to take it, first talk to your loan officer. It’s pertinent that you keep your current job. We will do a final verification of employment 24 hours before we close. And so please do not change any jobs. If there are any changes to your financial situation, please inform your loan officer.

Now, some don’ts once pre-approved that you want to pay close attention to.

Don’t open up any new trade lines because that will potentially decrease your credit score.

Don’t use your current credit cards. If we pulled your credit and your Capital One had a balance of a $100 and the limit was $500, and then we get to the closing on your new home, and you’re now maxed out at $500, that also has the potential not only to lower your credit score but to increase your income to debt ratio. Remember, the higher your balance on your credit card, the higher the minimum payment is, which impacts what you qualify for. So don’t use your credit cards during this process.

Also, also, when we talk about opening new accounts, here’s what happens. I had an individual, they were two weeks from closing, the loan was approved, they were ecstatic, and so they went out and did a Levin’s Furniture purchase. Levin’s started advertising no payments for four years. So the pre-approved home buyer thought, okay, we’re golden. No payments for four years. My lender won’t know. I’m good to go. That’s not the case because here’s what happens. Even though they may advertise no payments for four years as lenders, we lenders look at the worst-case scenario.

So if you bought $10,000 worth of furniture, and we assume that at the end of the four years, it wasn’t paid for. What’s the minimum payment due and if the interest rate at the end of four years is 15%, you have to qualify with that payment of $10,000 at a 15% interest rate, which will probably knock you out of qualifying for that particular home. It will affect your income-to-debt ratio.

So therefore, regardless of whether they tell you zero payments for X amount of years, do not open any new accounts because they can potentially impact your qualifying for that particular mortgage.

Just a helpful tidbit. Have a great day. This is Rodney Reynolds, your mortgage guy.

Email: rodney.reynolds@ruoff.com

Direct Line: 440-882-5403

Fax: 440-398-8173

NLMS # 190606

LO# 036126.000

MB# 803389.000

Looking to buy a home and would like to get started, contact us today at (440) 628-1321 so we can start planning your move.

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