Purchasing a home can be an exciting and nerve-racking time. There is always so much information and misinformation about how to approach the process the right way. Once your offer is accepted it can seem like a daunting task to prepare, both physically and financially, for your closing and upcoming move. The list below includes several things that Buyers should avoid at all costs or at least approach them with caution.
- Change marital status. How you hold title to your new property (e.g. Joint Tenants with Rights of Survivorship, Tenants in Common, Tenants by the Entireties), can be affected by your marital status. If you own a property as joint tenants and then get divorced, the joint tenancy is severed. Another example is if you purchase before you are married, you cannot own the property with your future spouse as tenants by the entireties (reserved for married couples). Be sure to make your title agency, real estate attorney, and lender aware of any anticipated changes in marital status.
- Change jobs. A job change can easily result in your loan status being denied. Must lending commitments are contingent upon continuing employment and if the lender finds out you are no longer employed with the company that you were with when applying for the loan, they may choose not to lend at all. If you are taking a lower paying job or a job in a different field, this may give the lender hesitance to continue with the loan. If you’ve already submitted all of your paperwork, don’t assume you can get away with a job change because often lenders will call and verify no change in financial or employment status just a few days before the loan.
- Switch banks or move funds to another Institution. After the lender has verified your funds wherever they are currently held, the money should stay there until closing. One exception to this rule is if you have to move funds between existing accounts in order to pull money for closing, but make sure to check with your lender first.
- Paying off Existing Loans or Debt. If your loan officer has advised you to pay off certain bills, credit cards, or loans, make sure to follow your lender’s advice, but otherwise, don’t make any big decisions or changes with your money without first checking with your lender. Your approval was contingent on your current financial status and any major changes could jeopardize your financing commitment.
- Make any Large Purchases. Major purchases that require a withdrawal from your verified funds or increase your debt can result in the lender denying your loan. A lender will often verify your credit or financial status prior to closing and if any new debt, or reduction in available funds are discovered, you may risk losing your loan.
In order to avoid pitfalls or mistakes like these, it is important to keep in close contact with your lender, title agency, and real estate attorney prior to closing. Always ask first and never making any rash decisions. If you have any questions about your up-coming closing or are looking for a title agent, lender, or real estate attorney, contact our trusted team at Cherewka Law (717) 232-4701.