Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But making big ticket purchases before your loan closes can be a misstep. There still remain a few major hurdles to jump before the house is realy yours. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't make expensive purchases. Although you may be planning ways to turn your new house into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Since lenders are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent career history should show consistency. Finding a new job (particularly one with a better salary) may not affect your ability to qualify for your mortgage. However, getting a new career in the middle of your approval process could influence your approval.
Don't switch banks or move cash around in your bank accounts. As the lender considers your loan package, you will probably be instructed to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid assets. To detect potential fraud, most lending institutions require detailed paperwork to verify the source of all cash. No matter the reason, switching banks or transferring money could raise a red flag with the lender and impede your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. The good faith money is to go toward your expenses closing; some FSBO sellers may not know this. You'll need to put the funds into a trust account, or get a neutral person, like an attorney to hold them until the deal closes. The final disposition of good faith funds, in the case of a failed transaction, should be specified 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.