“Hi Gary. I read your newsletter every week. My girlfriend and I want to get our ducks in a row before we buy a home. Is there anything we should or shouldn’t be doing?”
Answer:
Great question. Until you actually get the call that your escrow has CLOSED on your new home, here’s a few things not to do without clearing with your lender first:
1. No Major Purchases
Don’t decrease your savings or take on new debt by buying a car, furniture, appliances, jewelry, vacations, etc.
2. Don’t Move Your Money Around
Your lender needs to know where your down payment and closing costs funds came from. Moving money makes it harder for your lender to document where your money actually came from.
3. Don’t Cancel Credit Cards
Oddly, canceling credit cards or doing other things that you might guess will improve your credit score may actually hurt it. Talk with your lender first.
4. Don’t Cosign On A Loan
Though you think you’re just “helping” friend or family to get a loan, cosigning actually increases the debt that shows on your credit. And if that person doesn’t pay, you’re on the hook.
5. Don’t Change Jobs To A Different Field
In many cases, lenders want to see you on your job for two years. Changing employers, especially for more money, is fine.
