What to avoid when purchasing a home in Henderson

Posted December 27, 2021 in Real Estate Advice

WHAT TO AVOID WHEN PURCHASING A HOME IN HENDERSON OR LAS VEGAS

It is not uncommon for an escrow to be canceled because the buyer did not know what to avoid when purchasing a home in Henderson or Las Vegas. If a buyer makes the wrong move, they can disqualify themselves from receiving a loan or receiving a loan large enough to pay for the home they’re purchasing. Getting into escrow can be a stressful process and may have taken several attempts at making an offer before one seller accepted yours. Needless to say, disqualifying yourself from receiving a loan is not ideal. Below are a few things you can avoid or do to make escrow a smooth process for yourself.

PAYING OFF LOANS EARLY

The first thing you should avoid when purchasing a home in Henderson or Las Vegas is paying off and closing loans early, specifically car and student loans, which may not help you when you’re purchasing a home. This is because once those loans close out they no longer provide you with any credit history that you have gained on the account. Be sure to discuss with your lender if you have any upcoming loans that will be paid off while you are looking for and purchasing a home. This also depends on your situation, as your debt to income ratio may be too high and your lender may suggest you pay off loans early.

What to avoid when purchasing a home in Henderson or Las Vegas Nevada Desert Realty Henderson Property

PAYING OFF COLLECTIONS

Another answer to “What to avoid when purchasing a home in Henderson” is paying off collections. Collections can be confusing in how they affect your credit as the amount of each collection does not affect your credit score, but the date of the last activity. If you start to pay off collections, it will renew the date of the last activity and lower your credit score. If your credit score is lowered between getting pre-qualified and closing escrow on your home you may no longer qualify for as much money to purchase your home. Wait to be told to pay off collections before you reset the date of the last activity on your collections.

CLOSING ANY ACCOUNTS

You may think that closing accounts will make it easier on your lender to approve you for a loan, but you may be mistaken. Oftentimes lenders don’t like to see closed accounts because they’re worried the borrower has something they’re trying to hide. Closing accounts can also have a negative effect on your credit score as you lose the account history when you close out an account. Be sure to talk with your lender before closing out any credit card, bank, or other accounts.

OPENING ANY ACCOUNTS

If you’re worried about not having a credit score or not having enough credit history, don’t go opening 10 credit card accounts at once. Talk with your lender as this may not be a major issue. If it is an issue, ask them exactly what you should do to build your credit score or gain more credit history.

In summary, before you make any financial decisions while trying to buy a house, talk to your lender first. If you do have time while saving up to buy a home in Henderson or Las Vegas, you may want to meet with a lender 6 months to a year beforehand so you can get a plan to build your credit score as you’re building your savings. With the knowledge you’ll get from the lender, you’ll be on the right track and know what to avoid when purchasing a home in Henderson or Las Vegas.