The end of 2017 brought some exciting news to the Silicon Valley real estate market. Freddie Mac and Fannie Mae announced new loan limits. The median sale price for a San Jose home hit its highest mark yet ($1,050,221). And President Trump signed a new tax bill that caps mortgage interest rate and SALT deductions (State and Local Taxes). Inventory in the Silicon Valley real estate market continues to tighten. When you find a home, you don't want to lose it due to some silly mistake. For Silicon Valley home buyers, getting approved for your home loan is only the first step. Staying approved can be a little trickier.
Silicon Valley Home Buyers: Get Approved and Stay Approved
Keep Spending to a Minimum
You haven't even signed your final documents yet, but you're already remodeling your new Silicon Valley home. Perhaps new furniture is at the top of your list. Maybe you want a new car to go with your new home. Or, the lease is close to ending, and you can't wait a moment longer to upgrade to something else. Time to hit pause on the spending. Big purchases need to wait until AFTER you have your new house keys in hand. New debt and new credit affect your debt-to-income ratio as well as your credit score. If either one of these dips changes from what it was when your lender approved you, your "approval" could become a "decline." Even opening smaller lines of credit, or applying for a new cellphone can negatively impact you. It's best to just wait it out.
Pay Your Bills on Time No Matter What
This one should go without saying. But, when buying a Silicon Valley home, the last thing you want is to get your credit dinged for a late payment. This includes credit card bills, student loans, car payments, and utilities. Even if you're disputing a charge, you need to pay it anyway. Otherwise, you risk hurting your credit score and losing your loan approval.
Next, here's another one that shouldn't have to be said. But, if you're contemplating a job change, don't do it in the middle of your loan process. The job history of Silicon Valley home buyers is a contributing factor in the home buying process. Even switching from hourly to salary can affect your creditworthiness in the mortgage company's eyes. The only exception? A promotion with a bump in pay is always good.
No Money Transfers
Finally, keep your money where it is. Don't transfer large sums of cash between accounts without talking to your lender or Mortgage broker first. Lastly, don't deposit or withdraw large sums either without a very well documented paper trail of where the money came from or is going to. It's best just to let it lie where it is until after you move into your new Silicon Valley home.
Silicon Valley home buyers continue to have difficulty finding the perfect home. When you do locate the ideal home, you want to make sure you don't lose it to someone else due to negligence on your part. Avoid silly mistakes. Get approved. Then, stay approved. Contact me when you're ready to start looking for your next Silicon Valley home.