If you are considering purchasing a home in San Ramon or surrounding communities most likely you will need a home loan. The very first step in looking at properties is to get preapproved for financing. This puts you steps ahead of others that have not done their financial homework, and it shows sellers that you’re a serious buyer with your financing in place.
But even after you are preapproved, can things still fall apart?
I’ve seen this situation several times where buyers get preapproved with a lender for a certain amount of money and think everything is locked in and ready to go. At this point, they purchase a new car, get into their line of credit for new furniture, or spend the money in their reserve funds they had planned on using for the down payment or closing costs. By the time the loan documents get finalized and sent to escrow, their financing has completely changed and they are no longer approved for the amount they originally requested.
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Just because you’re preapproved doesn’t mean that it cannot change by the time the documents are closed. If you make severe financial mistakes or purchases, it can drastically affect whether you are approved or not. The lender always makes another credit check right before closing.
Here are some “don’ts” once you have been pre-approved for a home loan:
- Don’t buy a car.
- Don’t apply for any credit card.
- Don’t pay off any credit cards with large lump sum payments that you may need for closing costs, inspection fees or other costs.
- Don’t apply for any other loans, student loans, or mortgage loans.
- Don’t close any accounts.
- Don’t keep pulling your credit history or report.
You pretty much don’t want to make any financial changes once the lender has pulled all of your credit history and reports, debts, income and liabilities. Any major changes between now and when you’re home closes can affect your interest rate and whether you can get a loan at all.
For more information or to start the pre-approval loan process feel free to give me a call at any time. Because I am an expert in San Ramon real estate I can put you in touch with loan officers in the area, inspectors, appraisers, and help you find the right home.