Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there still remain some hurdles to jump. We have listed some things below you will want to avoid when waiting for your loan to close.
Don't buy big-ticket items. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to purchase expensive items can also create a mistake: many lenders look at your available cash when approving your mortgage.
Don't go on a career search. Lending Institutions look for a consistent job history on your application. Getting a new career before you start the application process for a mortgage may not jeopardize your approval at all. But in some cases, changing jobs during the mortgage loan application process might bring concern and affect your application.
Don't move finances around or change banks. Your lender will instruct the submission of recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. In order to detect fraud, lenders require a clear and consistent picture of how you earn your money and where any additional wealth comes from. No matter the purpose, moving banks or transferring funds might raise a red flag with the lender and slow your application process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until closing. Some sellers may not realize that your earnest money is to go toward your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may place them temporarily into a trust account until you close. The final disposition of earnest money, in the case of a failed transaction, should be included in the contract with your seller.
America's Money Source can answer questions about these "Don'ts" and many others. Give us a call: 4078987559.