When you’re trying to buy a home, making yourself as attractive as possible to lenders is a must. Maintaining a solid credit score and a steady work history are good places to start but you also need to be mindful of how you handle your money.
At some point during the home-buying process, your lender will want to take a close look at your bank accounts to verify both your assets and expenses. To avoid creating unnecessary obstacles when you’re trying to qualify for a mortgage, you’ll want to steer clear of certain missteps that could cast your banking history in a negative light.
1. Shuffling money between accounts
One of the things that lenders look for when you apply for a mortgage is whether you have enough cash on hand to meet all of your financial obligations. The way they verify that is by looking at your bank statements. If you’re constantly moving money in and out of your accounts or transferring money from one bank to another, you’re just making more work for yourself when it’s time to document your balances.
Opening one or more new accounts to transfer funds is also a bad idea because it can have an adverse impact on your credit. Some banks will run a credit check before allowing you to open an account, which shows up as a hard inquiry on your report. Each inquiry can ding your score by a few points, which could impact your chances of eventually getting approved.
Tip: Consolidating your home buying funds into an online savings account is a good way to grow your money while you’re shopping around for a loan.
Here are the top online banks that have highest savings accounts rates and free interest checking accounts: