DO NOT’S WHEN PURCHASING A HOME
All lenders will re-check your credit report, and verify your employment just before closing. If, they see any changes on your mortgage application, credit report, and verified down payment, assets, reserves, etc., they are able to issue a loan denial at the last minute. Please, hold off on getting a new car, new furniture, new appliances, etc., until after you have moved in.
Below, are a few simple things that could cause a loan denial when purchasing a property.
Do not with your credit report.
Do not have your credit pulled.
Do not get any new debt during the process.
Make all your payments on time.
Do not be “good” and close any opened credit accounts.
Do not go over your current available credit card limit.
Be current on all your payments accounts.
Do not pay off any collections, or Judgements.
ASSET DO NOT’S
Do not spend any of your savings or retirement money.
Do not spend your down payment.
Do not make large deposits or withdrawals that you cannot document.
Do not change your marital status.
How you hold title is affected by your marital status. Meaning, don’t file for a divorce.
Do not change jobs.
A job change may result in your loan being denied, particularly if you are taking a lower-paying position or moving into a different field. Do not switch from a salaried job to a commissioned job.
Do not switch banks or move your money to another institution. Do not transfer large sums of money.
After, the lender has verified your funds at one or more institutions, the money should remain there until needed for purchase. Do not transfer large sums of money between bank accounts. Do not make random, undocumented deposits into your bank account.
Do not pay on existing accounts unless your lender requests it.
If, your Loan Officer advises you to pay off certain bills in order to qualify for the loan, follow that advice. Otherwise, leave your accounts as they are until escrow closes.
Do not make any small or large purchase with credit. No not get new credit to buy a car, furniture, etc)
A purchase that require a withdrawal from your verified funds or increases your debt can result in your not qualifying for a loan. The lender will check your credit or re-verify funds at last minute (before closing), so avoid purchase that could impact your loan approval.
Do not make any payments late on debts.
Do not forget to pay your bills included the ones in dispute. Even just one 30-day late payment will bring your FICO score down.
Do not accept a big wad of cash.
If, your parents want to give you a few thousand bucks as a housewarming gift, don’t cash the check until after you close on the loan. Do not accept a cash gift without completing the proper “Gift” paperwork.
Do not spend verified reserves.
This is the money in a bank account that has been verified as two-to-three months of monthly payments (called reserves).
There are other Do Not’s, but these are the Big Don’ts when purchasing a property. If, there are any doubts on whether to do something or not. Please, give us a call. So, the mortgage application will not be denied just before closing.