10 Commandments of Homebuying
The following 10 things are the biggest no-no's when trying to achieve financing for a home. Doing any of the following will possibly result in altering your credit score or debt to income ratios. Breaking these commandments can deny your chance of closing on the purchase of your home.
*Please note that we are in NO way acting as a lender or loan officer. These are simply meant to help you. We have experienced these problems within our time as Realtors. If you have any questions you should contact your lender or loan officer*
DO NOT purchase or lease a new car, truck, van, suv, boat, airplane, helicopter, bus, submarine.... I think you get the point. If you don't plan to live in it then don't buy it! If you run into a Realtor friend or family member that you forgot about and you tell them "I'm buying a house" if they tell you "Congratulations! You should go out and celebrate with a new car, truck, van, suv, boat, etc"... Don't listen to them.... It's our industry's way of saying "Congratulations!" It's kind of like you tell an actor/actress to "break a leg" before they go on stage.
DO NOT use your credit cards or fall behind on the payments.
DON NOT change jobs or becoming self employed. For most financing options for self employed individuals you will have to have at least 2 years of tax returns to prove your income. I know it sucks....I have to go through it too... Yea, fun fact...Realtors are self employed. We are independent contractors for our brokers.
DO NOT purchase anything until after the closing. Don't go start buying couches; new fixtures to replace Barb's 1990's gold bright gold fixtures throughout the house; new 116 inch tv because "IT WILL FIT"; new refrigerator because the Seller's were leaving their fist "ice box" as a closing gift for you and your new fiancee; I mean I can go all day with things that have happened in the past but that's another blog for another day and possibly another website (I'll have to ask the broker if it's acceptable to put it on our professional sight or if I will have to use an alias (that sounds fun just thinking about it)....anyway squirrel... back to the blog.
DO NOT co-sign for anyone.... NO ONE... not ya momma, daddy, sister, brother, brother from another mother, granny, cousin down the lane...NOBODY!! Their debt becomes your debt...I bet they didn't explain that to you!
DO NOT buy any furniture before you buy your house... Unless you are paying cash that is not in a bank DO NOT buy furniture. Do not do a rent to own or payment plan either because those open new lines of credit and can cause a change in your debt to income ratio.
DO NOT make any new inquiries on your credit report. EVERYTHING seems to require credit checks these days. Cable, internet, cell phones, line of credit, rental cars, any little thing can open a credit inquiry.
DO NOT save the money that you have saved for your down payment. You may think you don't need all of the money that you've saved BUT there are closing costs, pre-paids, and loan and title fees. Just because you have enough for 7% of the sales price and only need 3% you will generally need another 3-5% towards closing costs, pre-paids, and fees.
DO NOT change bank accounts. The lender has already verified the bank accounts that you provided to them. Changing the accounts is suspicious and cause a delay or denial of your home loan.
DO NOT make any large deposits into your bank account. If you make a $45,000 deposit once a month every month and it comes from a traceable source then you're ok (still have a conversation with your lender). If you have $10,000 in cash sitting in your closet from unclaimed tips or cash business that has not been reported to the IRS then you can not deposit that money.