When Paying Off Credit Cards Is Not A Good Thing

Dated: 06/24/2015

Views: 520

You've found the PERFECT home! It has every item on your checklist, in the neighborhood with the best schools, and you're excited, and holding your breath at the same time, trying to make sure nothing happens that would prevent you from getting this little Camelot. You decide to improve your chances with the banks, and pay off your credit cards, and that one little nagging collection item. You CANNOT lose this house. It's GOT to help, right?

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A recent article by loan officer Barbara Mooers addresses the loan process in an "FYI" kind of manner, and explains that there are several Do's and Don'ts when you're in the home buying process.

For the Do's:

    Do keep the process moving by responding to your loan officers’ requests for documentation as soon as possible.
    Do make decisions as soon as is reasonably possible.
    Do convey questions or concerns you have as they develop.
    Do continue to make all of your rent or mortgage payments on time.
    Do stay current on all other existing accounts.
    Do continue to work your normal work schedule with no unplanned time off.
    Do continue to use your credit as normal.
    Do be prepared to explain any large deposits in your bank accounts.
    Do enjoy purchasing your home but remain objective throughout the process to help make decisions that are best for you.

On the flip side, are the DON'Ts:

    Do not make any major purchases (car, boat, jewelry, furniture, appliances, etc.).
    Do not apply for any new credit (even if it says you are preapproved or “xxx days same as cash”).
    Do not pay off charges or collections (unless directed by your loan officer to do so).
    Do not make any changes to your credit profile.
    Do not change bank accounts.
    Do not make unusual deposits into your bank accounts or move money around from one account to another.

If you'd like more information on your best plan of action for your particular situation, contact The Shields Team at (423) 896-1232 or reach out to our trusted lending partner, Tuan Nguyen at United Capital Lending at (423) 791-4188

*photo credit to Shutterstock.com

Article: "6 things homebuyers should avoid doing once they are pre-approved for a mortgage"; http://www.inman.com/next/the-dos-and-donts-of-the-home-loan-closing-process/

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Rayne Price

Holding a BS in Environmental Science, and MA in Education, real estate was not Shields Team Buyer Specialist Rayne Price's first career choice. It was only after encouragement from his wife and a cl....

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