I was cruising around Facebook earlier and a Realtor® friend of mine posted that she nearly had a heart attack when driving up to a home inspection today. Her buyer had pulled up in a brand new car (I know she was thinking – clearly he hasn’t read about the 10 Ways to Lose Your Home). She, and the buyer, will live to see another day as the new car was the buyer’s brother-in-law’s car.
In the last two posts we have learned that if you want to close on your home it is best to stay in your current job, not let your payments fall behind, and not to buy any new cars or furniture. By now, you are probably catching on that it is best not to change anything in regards to your financial situation when buying a home. Just three more items to discuss before we move on to other topics.
My heart sank when the buyer drove up in a new car Click To Tweet
Thou shalt not make large deposits without checking with your loan officer.
You might think that getting money is a great thing. It might be. It might not be. The lender has to be able to source all of your funds. This is just a fancy way of saying that you have to be able to prove where every penny in your bank account comes from. If you get a direct deposit from work or an income tax refund electronically deposited, it’s easy to verify their source. If however, you get $100 for selling your lawnmower or $2,500 for selling your golf cart and deposit the cash into your bank account, it isn’t very easy to prove that is where the money came from. It is good to clean out your garage when you move and why not make a little extra money for your trouble? It is fine; just do it after closing or wait to deposit the money.
Your lender is required to verify that all money used in the transaction is from an acceptable source. Acceptable sources will vary by type of loan, but no loan allows for funds that come from illegal sources. And yes, people have tried to use funds from illegal sources. It happens more often than you might think.
Thou shalt not change bank accounts.
This either seems like a no-brainer or a what do you care when we have to discuss this with people. When I first started lending, we did not care or, at least, we did nothing to chase after the issue. Once your money was verified, you just showed up to closing with the cashier’s check and that was it. We assumed that the cashier’s check came from the account you verified on your loan application. Today, it is a very different scenario.
You are paying for the sins of other borrowers Click To Tweet
Fraud is rampant and people are trying very interesting ways to get around the system and the rules. For example, you have money in your account, but you don’t want to use it. So you go to mom and dad and ask for a gift. That’s all fine and well, but the loan program you chose doesn’t allow for gifts. So you verify your account and then use mom and dad’s gift to actually close the loan. These days, we have to verify that the funds you bring to the closing table are from the account you verified.
So if you close your account and open a new one, that new account is not a verified account. We can work with you to verify that you closed your old account and transferred all of the money to a new account. But, that is a lot of extra work. Probably best to change accounts after you buy your new house.
Thou shalt not co-sign for anyone.
This rule has implications for not only buying your dream home, but also for keeping it. You may think that you are being a good friend when you co-sign for someone so that they can buy whatever shiny new object has caught their attention, but it ain’t always so. You cannot predict the future. You don’t know that this friend will pay that loan you co-signed for. Even if they do pay, it might not be on time. Guess what? If you consigned for them, their late payments become your late payments and impact your credit score! If they don’t pay at all and they default on the loan, the bank is going to be looking to you for payment.Drop the pen! DON’T do it!!! Click To Tweet
While these 10 items aren’t the only things you can do to miss out on being able to close on your dream home, they cover a huge swath of what we see on a regular basis. If you stick to these commandments, your home buying journey will be that much easier.
If you have a burning question or just want to chat — I love to be social……you can reach me on Twitter (@ChrisellaLoans), Snapchat (Chrisella2), CyberDust (Chrisella), email ChristyS@StarkeyMtg.com, at the office at 912.721.9400, and my website at www.LoansWithChristy.com . Find out more about me and more ways we can network (Facebook, Instagram, Twitter) at www.about.me/chrisella
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