You are given a list of things to do by each industry professional that you will work with during the process of your transaction. What about the things that you are NOT supposed to do after you are under contract?
Every time that we meet with a client we do our best to explain to that what not to do when they are under contract. However, people will make mistakes and unfortunately life happens. Make sure that you avoid ruining your purchase transaction by avoiding these mistakes:
Do not change address on anything including pay stubs or bank statements until the day you own the property. It is exciting to put your future home address on your pay subs and maybe even your ID card but you need to avoid it. Your lender will not want to deal with inconsistent loan documentation. Changing addresses on your financials will cause delays and also cause you to provide additional explanations that will be nothing more than a loss of time for you and everyone else involved.
Do not put utilities in your name until the day you own the property. The utility company will most likely run your credit when you change the name on the bill. This will raise a red flag for your lender. In addition, you don’t want to end up paying utility bills if you are not the person living in the home. Once you move in, you will have plenty of time to change your name on the bill.
Do not deposit cash or unverifiable assets into your checking or savings account. This is another huge red flag for lenders. Cash is never able to be verified. If you can’t verify your down payment with a paper trail don’t even bother with depositing cash.
Do not have NSF or overdraft fees in your checking account. If you can’t keep enough money in your account to keep it above negative, why would a lender give you hundreds of thousands of dollars?
Do not take on any new debt or raise credit card balances. Just because you are pre-approved doesn’t mean you can take on new debt. Lenders will run your credit te day of your closing to make sure that you didn’t purchase a new car, credit card, or even another house. While you are working on a loan do not even have your credit ran.
Make Payments On Time
Make sure all payments for current debt are made on time. Again, your lender will check your credit the day of closing. If you have new late payments or collections you are risking your ability to purchase your new home.
Enjoy Your Home
Once it is all said and done you can take a breath and enjoy your new home. No more credit review, no more pay stubs, no more bank statements. At this point all you have to do is pay your mortgage on time.