Don't Trip Yourself up While Buying your Home
What's more fun than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before closing can be harmful. Keep in mind that until your keys are in hand, your lender is watching your finances very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours parlor, but it's advisable to stay away from making big ticket buys like furniture, appliances, jewelry, or cars until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. It's even a bad idea to make those big-ticket purchases using cash. Lending Institutions are examining your available cash when considering your loan.
Don't go on a career search. Stability in your work history is a positive thing to banks and other lenders. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, switching careers in the middle of the application process might affect your approval.
Don't take your accounts to a new bank or move around your finances. As the lending institution considers your loan application, you will likely be asked to provide bank statements for recent months on your checking and savings accounts, money market funds and other liquid wealth. To eliminate potential fraud, most lending institutions need detailed paperwork to verify the source of all cash. No matter the reason, switching banks or transferring money might raise a red flag with the lender and slow your loan process.
Don't give money directly to your seller (commonly in cases of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Any good faith money is to go toward your expenses upon closing; some FSBO sellers might not realize this. It's advisable to put the funds into a trust account, or get a neutral party, like an attorney to hold them until the deal closes. The final disposition of earnest money, in the case of a failed transaction, should be documented in the contract with the seller.
Tenby J. Dahman The Dahman Team can walk you through the pitfalls of getting a mortgage. Call us at 3038627760.