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.
©2000 by Terry Light and RealEstate ABC, revised 2004
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