3 Key Risks To Avoid When Buying A Home

If you are planning on buying your home, it’s easy to make costly mistakes. Here is a list of three key mistakes to avoid during your buying process.

Job Change

It is important to notify your lender as soon as possible if you plan to change jobs during the mortgage application process. Once your loan has been approved, changing jobs can be risky. In many cases, lenders will do a final check to ensure employment status and income haven’t changed since a final loan approval was issued.

Examples:

Moving from a salaried position to one based on commissions or bonuses
Becoming a contract employee or self-employed
- *entrepreneurs need to show two years of T4’s to apply for a mortgage
Moving to a completely different industry or position
- New jobs consist of probationary periods which could result in loss of job

Buying a new car

Did you know that your monthly car payments could prevent you from getting the mortgage you need to buy the home of your dreams? When you can’t afford to make your car loan payments or when your car loan consumes a significant amount of your monthly income, your chances of getting approved for a mortgage will be reduced.

Examples:

Buying a car can affect your credit score
Buying a car can affect your buying power

Getting a new credit card

Homebuyers must apply for a mortgage, a lengthy process that includes extensive credit checks. Applying for a new credit card, for example, could complicate your homeownership plans.

Examples:

Your score could be improved by adding to your credit limit, which results in a lower credit utilization rate. However, a new card can also damage your score if it delays the age of your accounts.
Each application can deduct points from your score, in a short period, many applications can cause a lot of damage.

For better understanding and additional risks that can affect buying a home, The MINK Group can connect you with hand selected mortgage brokers who are dedicated to providing their clients with knowledgeable guidance and personalized attention throughout the buying process.