•DO take the time to get fully pre-approved. This is by far the most important step in ensuring you will have a pain free home buying experience. Take the time to work with a lender that fully reviews your income, credit and reserves documentation and makes sure you are able to close. If there are any blemishes or issues with your loan, they should be discussed and signed off with an underwriter to avoid any issues later on.
•DO stay current on all your existing credit cards and other accounts. A single 30 day late payment on a credit line can significantly lower your credit scores and put your ability to close in serious jeopardy.
•DO continue to save as much money as possible in your bank. Buying a new home may incur unforeseen costs such as cleaning supplies, tools, window treatments, etc. that you may not anticipate. It’s a good idea to make sure you have extra funds on hand as needed.
•DO keep current copies of all of your personal documents such as paystubs, taxes with W2’s or 1099’s, bank statements and any other docs requested by your lender ready and accessible in a handy file.
•DO request a copy of the Terms and Conditions of Withdrawal from your 401k administrator if you are planning to use this as your source of funds to close. It can take several days to obtain the terms from your plan administrators and you don’t want to play the stressful waiting game during an open escrow. Unless you’re into sleepless nights of course.
•DO keep your lender informed of any major life changes such as marital status, employment changes, extended travel plans or relocations. Pretty much anything that you think may be of importance.
Yes, we know, we know, you’re excited about your new home and want to go furniture shopping right away. We are excited too…but let’s close on your mortgage FIRST! Once your escrow is officially closed, you are free to make any and all of those purchases you’ve been holding off on.
And now, let’s flip this coin over and take a look at what you DON’T want to do. Yeah, yeah, we know, bummer, but we have to go down this path too. So, here we go…
•DON’T change or quit your job without discussing it with your lender first. Yes, painfully so, this has happened. Your pre-approval is based on your current job history and income, so making a change, even if it means taking on a higher-paying job, could change your ability to qualify for your new home.
•DON’T open, cosign or let anybody use your credit for any reason without consulting your lender first. We will run soft pull credit report right before funding and any new debts could be a deal killer at the end.
•DON’T close any revolving credit accounts, even if they have a $0 balance. This could negatively affect your credit score as it will change your percentage of available credit, credit history, mix of credit and account payment history.
•DON’T finance or charge any new debt or co-sign on any loans. New debt – even as a co-signer – will affect your debt-to-income ratio and credit score.
•DON'T transfer or consolidate credit card balances. It may sounds like a good idea to lower your rates to a lower amount, but that could result in a drop your credit scores in the short term.
•DON'T pay off any charge offs or collections unless specifically instructed to do so by your lender. Some debts may need to be paid off, others won’t. And the manner and order in which they are paid off matter, so leave it to us to help guide you on how to do this.
•DON'T change bank accounts or deposit large amounts of cash without consulting with us first. Just like the paying off of debts, the manner and order in which this is done matters, so check with us for instructions and “paper trail” requirements before doing anything significant with your bank accounts.
•DON'T change the way you filed your taxes without letting us know. This mainly applies during tax season, but there have been cases in which the deductions claimed changed the amount you are able to qualify for.
•DON'T use a different account to wire your funds to close with during escrow. Use the same account we started off with and minimize any large cash deposits into this account. Otherwise, we risk having serious issues closing you on time and gathering the needed paper trails to close your deal.
By now it’s probably becoming pretty clear that the rule of thumb is “Don’t Change Anything” without talking with us first. We are here and ready to answer any questions or concerns you may have.
