When buying a home there are things a buyer can do to help the process and things they can do to hinder the process. This excellent post by Dr. Chantal Saucier of Keller Williams Realty Acadiana is an excellent list of do's and don'ts.
For the Mel Brooks fans out there we know that in History of the World Part 1, Moses originally had 15 commandments and he drops one of the tablets, giving us just the 10 commandments. (I like comedies!) So I'd like to add a few additional "Commandments" that I also find valuable and hope that when buying your house you don't drop the 3rd tablet.
1. Keep copies of your pay stubs.
2. Keep copies of your bank statements.
3. If you are going to get a gift, or take money from your 401k talk with me BEFORE taking the money out, or making the deposit.
4. Tell your loan officer what they need to hear, not what you think they want to hear or only what you want to tell them.
5. Find a house you really love, and can afford.
These 10 Commandments home buyers must follow may seem like common sense to many. Buyers, however, can sometimes forget with all the excitement surrounding the buying of their new home. In the past couple of weeks, I have heard of two separate buyers who saw their home loan turned down, and their dream shattered, a few days before closing because they had bought furniture for their new home before it actually became their home. Both of them now have beautiful furniture with no home to put them in.
These two buyers were not my clients but it always hurts when I hear of transactions falling apart for reasons that could have been avoided. These 10 commandments are part of the buyer packet I give all my clients when we first meet and I always stress that once they get pre-approved and the process is started, they can't do anything that might affect their credit.
1. Thou shalt not change jobs, become self-employed or quit your job.
2. Thou shalt not buy a car, truck or van (or you may be living in it)!
3. Thou shalt not use credit cards excessively or let your accounts fall behind.
4. Thou shalt not spend money you have set aside for closing.
5. Thou shalt not omit debts or liabilities from your loan application.
6. Thou shalt not buy furniture.
7. Thou shalt not originate any inquiries into your credit.
8. Thou shalt not make large deposits without first checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.
If you are in the process of buying a home, remember that your credit must not change or be affected in any way until you actually sign the paperwork and get possession of your new home. Lenders will not only look into your credit when you first get pre-approved, they will check it again (and sometimes again and again) before they let you sign the mortgage. If you want to buy new furniture for your home or change jobs, just be patient. There will always be time to do it after the closing.
Please be green and recycle. When you are done reading this post, please recycle it by forwarding it to someone you think who will enjoy reading it as well. Thank you!
As quoted in the New York Times "A Little-Known Loan Program", and in the Hartford Courant "Moving In:Couple Combining Households Buys In Newington" and "Moving In... New Britain"