Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new stuff to adorn your future home? Nothing. But making large purchases before your loan closes can be a misstep. Until the house is really yours, there still remain some hurdles to jump. Here are some actions to stay clear of during the home buying process to be sure your transaction goes smoothly.
Don't buy big-ticket items. Although you will be planning ways to turn your new house into a showplace, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new electronics on your credit cards in the middle of your loan process. Using cash to buy big-ticket items can also be a problem: many banks consider your cash on hand when approving your application.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Getting a new career before you start the application process for a mortgage may not compromise your approval at all. But in some cases, getting a new job during the mortgage loan approval process may raise concern and hinder your approval.
Don't switch banks or move money around in your bank accounts. Your lender will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To avoid fraud, lenders need clear documentation of how you earn your money and where additional wealth comes from. No matter the reason, moving banks or moving funds from one account to another can raise a red flag with your lender and slow your approval process.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's until the sale is final. Any good faith money is to be used for your expenses closing; some FSBO sellers may not understand this. Find an attorney or other neutral person who is able to hang on to the deposit or place it in a trust account until you close. The final disposition of good faith funds, if your sale fails, should be written in the purchase agreement with your seller.
America's Money Source can answer questions about these "Don'ts" and many others. Call us at 4078987559.