{"id":88,"date":"2011-09-29T12:40:45","date_gmt":"2011-09-29T12:40:45","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?page_id=88"},"modified":"2011-10-20T18:45:17","modified_gmt":"2011-10-20T18:45:17","slug":"important-things-to-avoid-before-buying-a-home","status":"publish","type":"page","link":"https:\/\/www.anthonydidonato.net\/wordpress\/extras\/tips\/important-things-to-avoid-before-buying-a-home\/","title":{"rendered":"Important Things To Avoid Before Buying a Home"},"content":{"rendered":"

Other Things to Avoid Before Purchasing a Home<\/span><\/strong><\/p>\n

Don\u2019t Move Money Around<\/span><\/strong><\/p>\n

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.\u00a0 If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.\u00a0 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.\u00a0 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.\u00a0 So leave your money where it is until you talk to a loan officer.\u00a0 Oh\u2026don\u2019t change banks, either.<\/span><\/p>\n

The Effect of Changing Jobs<\/span><\/strong><\/p>\n

For most people, changing employers will not really affect your ability to qualify for a mortgage loan, especially if you are going to be earning more money.\u00a0 For some homebuyers, however, the effects of changing jobs can be disastrous to your loan application.<\/span><\/p>\n

How Changing Jobs Affects Buying a Home<\/span><\/strong><\/p>\n

Salaried Employees<\/span><\/strong><\/p>\n

If you are a salaried employee who does not earn additional income from commissions, bonuses, or over-time, switching employers should not create a problem. Just make sure to remain in the same line of work.\u00a0 Hopefully, you will be earning a higher salary, which will help you better qualify for a mortgage.<\/span><\/p>\n

Hourly Employees<\/span><\/strong><\/p>\n

If your income is based on hourly wages and you work a straight forty hours a week without over-time, changing jobs should not create any problems.<\/span><\/p>\n

Commissioned Employees<\/span><\/strong><\/p>\n

If a substantial portion of your income is derived from commissions, you should not change jobs before buying a home. This has to do with how mortgage lenders calculate your income. They average your commissions over the last two years.\u00a0 Changing employers creates an uncertainty about your future earnings from commissions. There is no track record from which to produce an average. Even if you are selling the same type of product with essentially the same commission structure, the underwriter cannot be certain that past earnings will accurately reflect future earnings.\u00a0 Changing jobs would negatively impact your ability to buy a home.<\/span><\/p>\n

Bonuses<\/span><\/strong><\/p>\n

If a substantial portion of your income on the new job will come from bonuses, you may want to consider delaying an employment change. Mortgage lenders will rarely consider future bonuses as income unless you have been on the same job for two years and have a track record of receiving those bonuses. Then they will average your bonuses over the last two years in calculating your income.\u00a0 Changing employers means that you do not have the two-year track record necessary to count bonuses as income.<\/span><\/p>\n

Part-Time Employees<\/span><\/strong><\/p>\n

If you earn an hourly income but rarely work forty hours a week, you should not change jobs. There would be no way to tell how many hours you will work each week on the new job, so no way to accurately calculate your income. If you remain on the old job, the lender can just average your earnings.<\/span><\/p>\n

Over-Time<\/span><\/strong><\/p>\n

Since all employers award overtime hours differently, your overtime income cannot be determined if you change jobs. If you stay on your present job, your lender will give you credit for overtime income. They will determine your overtime earnings over the last two years, then calculate a monthly average.<\/span><\/p>\n

Self-Employment<\/span><\/strong><\/p>\n

If you are considering a change to self-employment before buying a new home, don\u2019t do it.<\/em><\/strong> Buy the home first.\u00a0 Lenders like to see a two-year track record of self-employment income when approving a loan. Plus, self-employed individuals tend to include a lot of expenses on the Schedule C of their tax returns, especially in the early years of self-employment. While this minimizes your tax obligation to the IRS, it also minimizes your income to qualify for a home loan.\u00a0 If you are considering changing your business from a sole proprietorship to a partnership or corporation, you should also delay that until you purchase your new home.<\/span><\/p>\n

No Major Purchase of Any Kind<\/span><\/strong><\/p>\n

Review the article title “Don\u2019t 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\u2026\u00a0 \u2026and automobiles, of course.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Other Things to Avoid Before Purchasing a Home Don\u2019t 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 … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":82,"menu_order":1,"comment_status":"closed","ping_status":"open","template":"","meta":{"footnotes":""},"class_list":["post-88","page","type-page","status-publish","hentry","nodate","item-wrap"],"yoast_head":"\nImportant Things To Avoid Before Buying a Home - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.anthonydidonato.net\/wordpress\/extras\/tips\/important-things-to-avoid-before-buying-a-home\/\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/important-things-to-avoid-before-buying-a-home\\\/\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/important-things-to-avoid-before-buying-a-home\\\/\",\"name\":\"Important Things To Avoid Before Buying a Home - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania\",\"isPartOf\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#website\"},\"datePublished\":\"2011-09-29T12:40:45+00:00\",\"dateModified\":\"2011-10-20T18:45:17+00:00\",\"breadcrumb\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/important-things-to-avoid-before-buying-a-home\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/important-things-to-avoid-before-buying-a-home\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/important-things-to-avoid-before-buying-a-home\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Extra’s\",\"item\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Buyer Tips\",\"item\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/extras\\\/tips\\\/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Important Things To Avoid Before Buying a Home\"}]},{\"@type\":\"WebSite\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#website\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/\",\"name\":\"Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania\",\"description\":\"Properties and Real Estate for Sale\",\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":[\"Person\",\"Organization\"],\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/anthony-110x150.jpg\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/anthony-110x150.jpg\",\"contentUrl\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/anthony-110x150.jpg\",\"caption\":\"admin\"},\"logo\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/anthony-110x150.jpg\"},\"description\":\"For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. 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