Some Do Nots of HomeBuying
It is important for you , as a home buyer, to know that the documentation used to support your loan approval can be re-verified even until the day of closing.
You may be asked for updated pay stubs and bank statements. Most lenders verify you are still employed within a day of your loan closing.
Credit updates are also generally repulled just prior to your closing date.
As loan approval requirements get tougher and tougher, it is important to remember these lender rechecks.
Nothing is worse than going from an approval to a denial only days before your loan closes because of something you could have waited to do.
And it does happen.
So with that in mind here are Some Do Nots.
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Do not make bank deposits other than regular pay income deposits in the bank accounts you are using to qualify for your purchase. If you need to deposit anything unusual, be sure to discuss with your loan officer the documentation that may be needed. |
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Do not bring account balances below the amount used for the approval. Your bank accounts will be checked again prior to closing. The lender may require to see the most recent statement. Generally the lender will ask to verify that your earnest money and appraisal/credit report charges have cleared the account. Your funds to close must remain in your account, and the needed funds to close may very well include a minimum amount in reserve.
Dropping your account balance to a level below that used for your approval is risky business.
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Do not have return checks or overdraft protection. This is an extension of the previous DoNot. The lender considers your financial management ability as part of the loan approval. It does not look good for your bank statement balance to fall into the negative just prior to closing your home purchase. Even if you have overdraft protection, take special care to avoid going negative. Even if it does not impact your actual approval, it could cause closing delays or require unnecessary last minute documentation.
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Do not incur additional debt. This is probably the biggest loan closing killer. A new car. Some new furniture for your new home. Discuss with your loan officer any new debt - before you apply. Also mention any debt that has not shown up on your credit report when you apply. |
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Do not open new accounts. This is the same as opening new debt, but I list it separately because some people might not consider a department store charge card as a new debt. Any new account, even if you might not charge anything to it, should wait. The inquiry or the new account itself might impact your credit score. Plus it will just be additional, and unnecessary, documentation at the last minute to show that you have not used the new card.
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Any change to your finances - income, employment, bank account charges, bank account deposits, new credit, even new credit inquiries - should be discussed with your loan officer before they take place.
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