Don't Trip Yourself up While Buying a New Home
What's more fun than getting a bunch of new stuff to go in your future home? Nothing. But making big ticket purchases before closing can be a misstep. There are still a few major hurdles to jump before your loan closes. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't throw your money around. Although you may be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your 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. It's even a bad idea to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new career. Your recent career history should show stability. Finding a new career (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your loan. But for some, changing jobs during the mortgage approval process could raise concern and stymie your application.
Don't move finances around or switch banks. While your lending institution reviews your loan application, you will probably be instructed to submit bank statements for recent months for your checking and savings accounts, money market funds and other liquid assets. Your lender is looking for a steady rise and fall of your funds over the month, in order to rule out fraud. Even for innocent reasons, moving around money or switching banks may make it more difficult for your lending institution to verify your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Although some individual sellers may not realize this, the good faith money should go toward the buyer's closing expenses. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. If your sale falls through, your contract with the seller should specify where this good faith deposit should go.
Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Give us a call: 3038627760.