If you are thinking about purchasing a home, there are some major things you will want to avoid. While some of them may seem like common sense, it can never hurt to see them in writing.
Don’t Move Money Around
When a lender reviews your loan package for approval, one of the things they are most concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.
If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them. The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious and stall progress.
The Effect of Changing Jobs
For most people, changing employers will not really affect your ability to qualify for a mortgage loan, especially if you are going to be experiencing an increase in pay. For some homebuyers, however, the effects of changing jobs can be disastrous to your loan application.
For salaried employees, it is only beneficial to switch jobs if you will be earning a higher salary. Otherwise, changing positions won’t really affect your mortgage.
For hourly employees, as long as you work around forty hours a week without over-time, your job shouldn’t create any problems.
For commissioned employees, it is important not to change jobs before purchasing a new home. Since changing employers can create uncertainty about your future earnings, it could negatively impact your ability to buy a home. This has to do with how mortgage lenders calculate your income. They average your commissions over the last two years.
For part-time employees, if you earn an hourly income but rarely work forty hours a week, you should not change jobs. There would be no way to tell how many hours you will work each week on the new job, so no way to accurately calculate your income. If you remain on the old job, the lender can just average your earnings.
Avoid Major Purchases of Any Kind
Making major purchase right before you go to get a loan for a new home may not be the wisest decision. Should you buy that motorcycle you have had your eye on? No. Should you splurge on a vacation to a private island? Probably not. What about that 60” LED TV for Sunday’s football game? Uh-uh. You are going to want to avoid making any major purchase that would create additional debt of any kind.
Keep your goal of purchasing St. James NC real estate in your mind at all times. It will keep you from making impulse purchases and ruining your chances of getting a loan. Contact Sea Coast Realty today to start searching for Southport NC homes for sale.
Ken Keegan Real Estate Broker
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