DO NOT MOVE THE MONEY!
You will be required to provide proof of funds to your lender. This means…where did you get the money for your downpayment. Recently, I had a transaction where my clients were in a FRENZY having to verify where their downpayment was coming from. WHY? Because they had recently moved money around and had A LOT to verify. It was a PAIN…for them and the lender.
You may become frustrated with your lender, but they are only doing their job. To ensure quality control and eliminate potential fraud, it is a requirement to completely document the source of all funds. Moving your money around, even if you are consolidating your funds to make it “easier,” could make it more difficult for the lender to properly document.
ARE YOU THINKING ABOUT CHANGING JOBS?
Typically, a job change is not that big of a deal. Especially if you are going to be making more money. But there are some things to be aware of.
If you are a salaried employee…changing jobs to a completly different line of work can pose a problem. Make sure you keep your loan officer informed so they can help determine how this might effect your ability to qualify.
If you are a commissioned employee…DO NOT CHANGE JOBS WHEN TRYING TO QUALIFY FOR A LOAN. Lenders average your commissions over the last two years. If you change jobs there is an uncertainty as to what your income will REALLY be. Changing jobs will affect your ability to qualify.
ESPECIALLY hard to prove are bonuses. If you get a bonus and that is a significant amount…again….just do not change jobs when in the process of qualifying.
Another issue is overtime. This will be calculated as per your earnings over the past two years. All employers overtime varies…so hard to “count on”.
OK…the final category…self-employed. JUST DO NOT MAKE ANY CHANGES. Don’t suddenly decide to make changes like forming an LLC or a partnership. Just DO NOT DO ANYTHING different. What your last two years show as earnings are what the lender will consider. THE END!
MAKE NO MAJOR PURCHASES…INCLUDING A CAR!
Your “debt-to-income” ratio is the most important number in the qualifying process. This is the percentage of the gross monthly income that you spend on debt. Credit cards…student loans…installment debt and so on.
A CAR loan is sometimes the most detrimental. Let’s look at this scenario. You earn $5000 per month and have a car payment of $400. If your interest rate is 8%, you would qualify for about $55,000 LESS than if you did not have that car payment. It really makes a difference.
If you DID buy a car….do not let this discourage you from looking into buying a home….but if you are CONSIDERING buying a car…think about it carefully if you are also considering the purchase of a new home.
Also…DO NOT MAKE ANY MAJOR PURCHASES when considering a home purchase.
And…VERY IMPORTANT…Do not make any big purchases until AFTER CLOSING. The lender will check. Believe me…they will. If it changes your debt-to-income numbers during the buying process…SORRY….your loan will not be approved.
DO NOT go to a furniture store and let them run your credit and make a purchase. DO NOT go to the local home improvement store and buy new flooring. DO NOT buy appliances. Please….do yourself a favor and wait till AFTER closing.
CALL ME PEOPLE!!! I will guide you to a trusted lender who will give you the REAL STORY about your particular situation.
Next…choosing your lender VERY IMPORTANT
