Don't Trip Yourself up While Buying your Home
What's better than getting a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before closing can be a misstep. There still remain a few major hurdles to jump before your loan closes. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't buy luxury items. Although you will be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until your loan closes. Your lender may send up red flags if you finance your furniture on your credit cards in the middle of your loan process. Using cash to purchase big items can even be a mistake: most lending institutions consider your available cash when approving your mortgage.
Don't look for a new job. Lenders feel comfortable seeing a consistent job history on your application. Getting a new job may not affect your ability to qualify for a loan - especially if you are going to be making more money. But for some people, getting a new job during the mortgage application process may bring concern and stymie your application.
Don't switch banks or move finances around in your bank accounts. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will likely be analyzed as the lending institution makes decisions regarding your loan application. In order to eliminate fraud, lenders want to see clear documentation of how you earn your living and where additional money comes from. No matter the purpose, switching banks or transferring funds might raise a red flag with your lender and slow your approval process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith money actually belongs to you. A FSBO seller might not know that your good faith funds is to be used for your expenses at closing. Find a lawyer or other neutral party who is able to hang on to the funds or place them in a trust account until you close. Should your sale fall through, the purchase contract should indicate to whom your earnest money should go.
Tenby J. Dahman The Dahman Team can answer questions about these "Don'ts" and many others. Call us: 3038627760.