Or…How a few simple mistakes can cost you the home of your dreams.
Maybe you’re thinking this is the right time to fill that new home with furniture, or put that deposit down on the contractor who is doing some remodels the day after you get your keys. Ooo OOO, now that we have a house, we’d better get a new truck so that we can haul all those new plants and trees from the nursery!
HOLD THE PHONE!
Everything we mentioned above may trigger a red flag for your lender. And why is that?
Your lender is giving you a LOT of money to buy a home. Even if you’re putting 20 percent down, the average single family home in Santa Clarita is $500,000, or a half million dollars. Think about it. They have pre-appoved your home loan based on your credit score and debt-to-income ratio that you provided to them prior to making an offer on your home. They’ve based their decision on that particular set of financial info. If you decide to change the game, it makes lenders (And their underwriters) nervous that you may not be able to stick to a game plan, and may not be able to ultimately make your mortgage payments on time, if at all. By the way, pre-approval is not the same thing as final approval. Underwriters still need to go through all of the paperwork tooth and nail before they will fund your loan.
So here are a few “golden rules” of what not to do once you’re pre-approved.
Don’t make any large purchases with credit…or cash.
Not only will your lender run your credit report once more before they finally fund your loan. They will also verify your assets with your bank. Seeing a bump in your credit report (and the potential drop in your score as a result) can land your loan in hot water. As they may have pre-approved your loan based on your available assets, using cash to make large purchases during escrow may put you in jeopardy as well.
Don’t quit or change jobs.
This is huge. Your employment and income were used to pre-approve your loan. Even if you’re moving up to a better job at better pay, it still puts you back at square one when it comes to job longevity. If you’ve been offered a job, do your best to hold off the switch until after you close escrow.
Hate your boss? Same thing goes. Grin and bear it until you get your keys!
Don’t deposit large sums of money into your bank account.
“What? I thought this would be a good thing!” Okay, you finally got that huge bonus at work. Or perhaps you won it big in Vegas. Or maybe even you were surprised by a long lost uncle who left you some money. As crazy as it sounds, large sums of money that are suddenly deposited into the account verified by your lender is yet another trigger for the underwriters. If you did come into some cash, give us a call first so that we can advise you on how you should handle it prior to closing escrow.
We are here to help meet all of your real estate needs.
We pride ourselves on making sure your escrow process is as smooth and stress free as possible. Aside from the tidbits above, we can advise and guide you on making sure your escrow closes on time. Whether buying or selling, we’re here to help you reach all of your real estate goals. Contact us today for a no obligation consultation.