Don't Trip Yourself up While Buying a Home
What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. There are still a few major hurdles to jump before closing. We have listed some things below you will want to stay away from when waiting for closing.
Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. Your lender may send up red flags if you buy new furniture on your credit cards in the middle of your loan process. It's also a red flag to make those big-ticket purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new job. Lenders feel comfortable seeing a consistent career 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. However, getting a new career in the middle of your loan process could affect your approval.
Don't change banks or move finances around in your accounts. Your lending institution will instruct the submission of recent bank statements on your accounts: savings, checking, money market, and other liquid assets. Your lending institution looks for a steady rise and fall of your funds over the pay period, in the interest of ruling out fraud. No matter the reason, changing banks or transferring money may raise a red flag with your lender and slow your approval process.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. The earnest money is to go toward your expenses closing; a individual seller may not know this. You'll need to put the money into a trust account, or get an attorney to hold it until the closing of the sale. The purchase contract should dictate who keeps the money if the transaction falls through.
At Tenby J. Dahman The Dahman Team , we answer questions about this process every day. Give us a call at 3038627760.