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Things Not to Do Before Purchasing
a Home
No Major Purchase of Any
Kind
Review the article titled, "Don’t
Buy a Car," and apply it to any major purchase that
would create debt of any kind. This includes furniture,
appliances, electronic equipment, jewelry, vacations, expensive
weddings…
…and
automobiles, of course.
Don’t Move Money Around
When a lender
reviews your loan package for approval, one of the things they
are concerned about is the source of funds for your down payment
and closing costs. Most likely, you will be asked to provide
statements for the last two or three months on any of your
liquid assets. This includes checking accounts, savings
accounts, money market funds, certificates of deposit, stock
statements, mutual funds, and even your company 401K and
retirement accounts.
If you have
been moving money between accounts during that time, there may
be large deposits and withdrawals in some of them.
The mortgage
underwriter (the person who actually approves your loan) will
probably require a complete paper trail of all the withdrawals
and deposits. You may be required to produce cancelled checks,
deposit receipts, and other seemingly inconsequential data,
which could get quite tedious.
Perhaps you
become exasperated at your lender, but they are only doing their
job correctly. To ensure quality control and eliminate potential
fraud, it is a requirement on most loans to completely document
the source of all funds. Moving your money around, even if you
are consolidating your funds to make it "easier," could make it
more difficult for the lender to properly document.
So leave your
money where it is until you talk to a loan officer.
Oh…don’t change
banks, either.
Should You Change Jobs?
For most
people, changing employers will not really affect your ability
to qualify for a mortgage loan, especially if you are going to
be earning more money. For some homebuyers, however, the
effects of changing jobs can be disastrous to your loan
application. |
