Things a person buying a home must NOT do!!
1.) Don't Apply for new credit: One big mistake buyer's may make is getting a new credit line after they have a contract and are approved for a mortgage. Your mortgage is approved on mostly your credit score and your debt to income ratio. If you are approved for a loan, you are approved under the same conditions in which you applied. This means you should NOT go and buy new furniture, cars, appliances, or any other major purchases until your deal has been closed! Even if you apply for new credit and don't buy anything, it still may mess up your credit score just by getting a new credit line which could sabotage your home purchase.
2.) Do not move money around: It is best to refrain from moving money around when you are wanting to purchase a home. Banks look closely at paper trails when new money is acquired in accounts from another source. The best way to get money from another source is to have the money wired directly to the title company and make sure the title company has the proper gift letter(s) they will require for such funds at closing.
3.) Don't change jobs: Lenders want to see stability in a borrower's employment before they lend their money. Banks typically want to see at least 30 days of employment and often ask for pay stubs to prove your verification of employment (VOE). Again, once you are approved for the loan this does NOT mean you are in the clear and can switch jobs with no repercussions to getting your loan finalized. Often banks will run another (VOE) in final closing steps of the loan and if your conditions aren't the same then they may not approve your loan. Please note: If you are making a career or field change and not a lateral move (like a transfer, or switching companies but preforming the same task) it will take a lot more time for banks to give you the stable employment tag.
4.) Don't put off taxes: Banks are going to want to see your latest financial and tax information. It is best to have all these documents completed and ready to go when you apply for your mortgage. If you get money back in taxes you should put it aside until closing. You can use this money for the down payment on your loan, and the bank will love seeing that you are responsible with your funds.
If you have any questions about this article or have any other Real Estate concerns, please call me anytime (386)237-7079.
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