There Are No Nos to Be Aware of When Buying a Home
Congratulations! You have found the perfect home and have worked out an agreement with the seller. If you are obtaining a loan for your new home, your lender is going to be gathering a lot of information from you in order to verify the information that you provided on your loan application. Sometimes buyers run into issues by making employment or financial changes in the few weeks before closing – we want to help avoid that! So, here are some things NOT to do when buying a home:
- Cash. Many times the lender will need to review your bank accounts and verify the source and destination of deposits and transfers. This can include ensuring that your earnest money check cleared your account. DO NOT make cash deposits without talking to your lender first. Cash is not traceable and cannot be used as funds for closing/down payment or reserves. If you can, please also avoid making multiple transfers between bank accounts. Those transfers will need to be documented.
- Credit. We know that buying new furniture for your new home might be high on your list of to-do’s, but please wait to open any new credit cards (this includes in-store charge accounts) until after your closing is complete. DO NOT borrow cash from a credit card to help pay your closing costs. DO NOT buy a new car or take on any other debt without consulting your lender first. Should you pay off credit card debts before buying a home? Talk with your lender!
- Employment. Verification of Employment (VOE) is completed by banks and lenders prior to closing to make sure that the income you provided on your application is current and you are still holding the same job with the same pay. DO NOT quit your job prior to closing on your new home, and please discuss any job changes with your lender.
Please don’t let our all caps and bold font scare you away or make you feel like buying a home is too complicated. The reality is, you won’t make all those big moves or changes at the same time you’re buying a house. But it’s best to play it conservative and safe and speak with your lender about any financial and employment changes.
Speaking of lenders, if you’re in the market, please look into our preferred lender, Meggan McDonald with Supreme Lending. She and her team are incredibly knowledgeable, a leader in the industry and just genuine, professional people!