Following up on last month’s column with “10 Rules of Real Estate for New Buyers,” I’m offering these 10 Rules for Working with a Lender. Even if you’re a repeat buyer, you may find these rules a useful reminder of “thou shalt nots” during the period from contract ratification to settlement.
Presumably, you’ve already obtained pre-approval and may even be in the process of putting in a contract on a home. Here are some rules to help you out through the lender final approval process:
1. Thou shalt not change jobs, become self-employed, or quit your job during this period.
2. Thou shalt not buy a car, truck or van during this period (or you may find yourself living in it!).
3. Thou shalt not use your credit cards excessively or let current accounts fall behind.
4. Thou shalt not spend the money you have set aside for your closing costs (about 3.5 percent of the purchase price).
5. Thou shalt not have omitted debts or liabilities from your loan application.
6. Thou shalt not buy furniture or major appliances.
7. Thou shalt not originate any inquiries into your credit.
8. Thou shalt not make large deposits for 60 days without checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.
Basically you want to freeze your finances during this period so that no red flags appear for the underwriter to question. A good loan officer will be happy to answer any questions you may have about your finances during this period. Take advantage of that resource!
Here’s to a happy and successful closing.
Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city D.C. Reach him at TedSmithSellsDC@rlathome.com and follow him on Facebook, Youtube or Twitter. You can also join him on monthly tours of mid-city neighborhood open houses, as well as monthly seminars geared toward first-time home buyers. Sign up at meetup.com.