If you’re one who’s considering buying a Chicago home, it is important to remember that lenders have tightened the reigns on who qualifies for a home loan. While you may have great credit, there are a few mistakes you’ll want to be sure to avoid in order to secure your home loan. As the Shoreline Property Advisors team, we thought we’d point out four mortgage mistakes that you may not even consider when buying a Chicago home. Take a look!
1. Avoid any major purchases before closing your mortgage loan- Just because you have your mortgage approved and lined up doesn’t mean the deal is done. Banks are not afraid to pull out of the deal if they see the homebuyer makes a significant purchase such as a car or another major buy. They see this as a sign of further debt for the homebuyer and are nervous about the potential risks if the buyer can’t come up with the money. To be safe, avoid any major purchases until after your signed the contract on your Chicago home. This goes for cash purchases as well since banks will look at your cash reserve before you get approved for a loan.
2. Don’t make any big career changes- While this may be the reason you’re searching for a Chicago home, it’s better to avoid any career changes during the home buying process. Banks want to know that your financials are stable. If there is a career change pending, try to delay it until after you’ve bought the home. Or, delay the home purchase if at all possible until you can show that your new job is given you the financial resources to pay on your new home.
3. Prepare for a last-minute credit check- This may come as a surprise to some, but with Fannie Mae’s loan quality initiative that came out in June of this year, lenders are likely to do a second credit check right before you close. Make sure that you keep up with your credit card payments and avoid applying for a new credit card during the home buying process as they may see this as a sign of desperation and can call for another credit score check, which could hurt your credit score.
4. Watch out for closing-cost surprises- Avoid putting all of your money into the down payment as you’ll need cash for closing costs. Don’t be caught off guard! At times, closing costs can be as much as 3% of the home price, so be sure to keep this in mind and set enough aside.
We hope being aware of these four mistakes will help you avoid them and allow you to have a smooth home buying experience in Chicago! Our team of trusted advisors and Prudential Rubloff real estate agents are here to help and will provide you with the up-to-date Chicago Real Estate market information you need to know!
If you’re considering buying a home in Chicago, but have questions or have not yet found a Chicago Real Estate agent; please feel free to contact us. We would enjoy working with you and helping you through the entire home buying process.
Shoreline Property Advisors
@ Prudential Rubloff
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