Things to Avoid Before Buying
There are certain things you should not do when applying for a mortgage, otherwise it may impact your credit and destroy any chance of buying a home.
Things to avoid before buying your home
When buying your Salt Lake City home there are certain things you should avoid doing.
Moving Money Around
When applying for a mortgage loan one of the things that the lender will look for is a source of funds for a down payment and closing costs. They will do this by looking at your financial statements (these could including checking accounts, savings accounts, share investment accounts, certificate of deposits etc.) for the last few months. If you start moving money between your accounts then this makes the loan officers job more difficult to gauge the exact amount of funds you have. In order to ensure that loan fraud is not taking place they will need to produce a audit trail, which in turn means they will require more information from you, which could include check stubs, deposit slips etc.
When deciding upon the amount of money they will loan you, a loan officer will look at the amount of free money you have each month after all your usually expenditure. So what happens if you make a major purchase like a car and that car is financed? Well your monthly expenditure goes up and so the amount of money they will loan you goes down. This could mean that you can no longer get the home of your dreams and have to settle for something less. So wait until after you have purchased your home before committing to any major purchases.
If you change jobs just prior to or during your loan application then this could hurt your changes of obtaining a loan.
If your new jobs salary is not dependent upon bonuses, overtime or commissions then you should be OK changing jobs without impacting you loan application. The only exception to this is if you change your line of work. Changing jobs may actually increase your chances off obtaining a loan, after all you will probably be earning more money.
If your new job is dependent upon bonuses, overtime or commission then this could harm your loan application. The loan officer likes to look at past results and if you change jobs he cannot be confident that past results with your previously employer will be the same under the new employer.
If you are considering starting your own business, then wait until after your home purchase. The loan officer likes to look at past earnings for the self employed (usually the last 2 years) and if you are just starting out they will have nothing to base your income on, and so in all likely hood refuse your loan application.