No Major Purchase of Any Kind
Review the article titled, "Don’t Buy a
Car," and apply it to any major purchase
that would create debt of any kind. This
includes furniture, appliances, electronic
equipment, jewelry, vacations, expensive
weddings…
…and automobiles, of course.
Don’t Move Money Around
When a lender reviews your loan package for
approval, one of the things they are
concerned about is the source of funds for
your down payment and closing costs. Most
likely, you will be asked to provide
statements for the last two or three months
on any of your liquid assets. This includes
checking accounts, savings accounts, money
market funds, certificates of deposit, stock
statements, mutual funds, and even your
company 401K and retirement accounts.
If you have been moving money between
accounts during that time, there may be
large deposits and withdrawals in some of
them.
The mortgage underwriter (the person who
actually approves your loan) will probably
require a complete paper trail of all the
withdrawals and deposits. You may be
required to produce cancelled checks,
deposit receipts, and other seemingly
inconsequential data, which could get quite
tedious.
Perhaps you become exasperated at your
lender, but they are only doing their job
correctly. To ensure quality control and
eliminate potential fraud, it is a
requirement on most loans to completely
document the source of all funds. Moving
your money around, even if you are
consolidating your funds to make it
"easier," could make it more difficult for
the lender to properly document.
So leave your money where it is until you
talk to a loan officer.
