If you happen to be selling an existing home you have or you are looking to get your deposit back from a rental, you will want to try to avoid having a grand moving out party.
Along with this, you will want to remain as conservative as possible with your finances. Here is how you can do it:
1. Avoid Leasing or Buying a Vehicle
One of the things you should be doing is holding off on getting a new car. Now is not the time you want to go ahead and change rides. No matter if you are embarrassed, you want to hold off on getting a new vehicle. It doesn’t matter if your kids are having to duck their heads as you drop them off for school, you don’t want to get bogged down in high-interest payments. Any high-interest loans you take out, lease payments, or anything else will end up negatively impacting your debt-to-earnings ratio which can limit your ability to make mortgage payments. This causes you to become a much more risky person to lend to.
2. Say No To Deferred Loans
No matter if you need to make the first payment for the loan as late as next year, you will end up paying for your mortgage for a very long time. All of those payments are going to make you a much greater risk for anyone who is considering giving you a loan. Keep in mind, all of the lenders are going to be wary of those with hefty monthly expenses.
3. Avoid Switching Jobs
Try not to switch jobs if you are only making a move laterally. Even if you are in for a big payday, it causes your lender to have to validate you through a whole new process to ensure everything is good. Try to avoid making the lender have to do any more due diligence than they have to. They don’t enjoy it and they may even label you as a ‘job-hopper’ which is something they despise.
4. Give Your Lender Information If You’ve Come Into Cash
A lot of those who are looking to buy a home will need to look everywhere for the cash they need to make their down payment and to cover all of the closing costs. No matter how you are getting extra cash, you want to make it clear that you are getting it. Your lender is going to want to know about this because it will make you less risky in their minds. They want to know that you are getting extra income or cash without strings attached to it. Meaning, you won’t have to repay anyone for it. You don’t want to take out anything like cash advances to do this. Never use cash advances from any existing lines of credit that you have. Likewise, you don’t want to go around taking money from your investments because you will have tax penalties that you have to deal with.
5. Avoid Running Up Your Credit Card Debt
No matter if you are using credit cards to pay your bills or buying new things all of the time, you should avoid running up your credit card debt as much as possible. Likewise, you should temporarily freeze opening any new accounts. This is especially true as it relates to retailer or department store cards. This type of activity will make any lender shake in fear because you will only be increasing your debt to income ratio making you a riskier bet for them.