5 things NOT to do when getting ready to Buy a Home

Buying a home is one of life's most exciting events and you have probably planned for, and worked hard to get to this point. To ensure that things go smoothly, don't make one of these 5 very common mistakes!  Sometimes the things listed below are unavoidable...if that is the case, please make sure you speak with your lender before doing any of the things below and he/she might be able to help you do things the right way!

  1. Do NOT make a job change. If at all possible, do not change jobs, quit your job, move from full-time to part-time, go back to school, or retire. Even if you are fully approved for your mortgage and then make a change, it could still affect your ability to close on a home because the mortgage company will call your employer the day before or day of closing to verify that your employment status has not changed.  If it has changed, you might not be able to close on your home!
  2. Do NOT deposit any money into your bank accounts that is not coming from your employer.  Any deposits you make or any transfers into your bank account for at least 3 months before your puchase will need to be documented. If you are planning to make a deposit into your account, please speak with your lender before doing so to make sure it won't cause any problems.
  3. Do NOT take out any new loans or accumulate any new debt.  This means no car purchases, no furniture purchases, no applications for new credit cards. We have too many examples of home buyers who went to the furniture store and purchased a new bedroom set on a 6 month interest free financing plan through a furniture store credit card and their new home closing fell apart as a result.  Just like your employment status, your lender will do a final check of your credit to make sure nothing changed and if they see new debt, it could affect your ability to close.  This also means you can't be LATE on any loan payments because that will raise red flags too!
  4. Do NOT delay filing your taxes. Your lender will require at least the past 2 years of tax returns and they will verify the information you give by requesting copies directly from the IRS.  If the return you give doesn't match the return provided from the IRS or if the IRS does't have your tax return yet, you probably won't be able to get a mortgage loan.  If you are self employed, this will also include filing your business tax returns.
  5. Do NOT use funds from a business account if the purchase is being made for your personal use.  Any money used for your home purchase that comes from your business account will pose problems for your loan process and it is best to avoid using these types of funds.  This also means you should NOT write your earnest money check from a business account!

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