Don't Trip Yourself up While Buying your Home
What's better than buying a bunch of new furnishings to adorn your future home? Not much. But buying big ticket items before closing can be a misstep. It's best to remember that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lenders are examining your financial accounts, a large cash purchase is also a mistake.
Don't get a new job. Lending Institutions look for a consistent career history on your application forms. Finding a new career (particularly one with a better paycheck) may not jeopardize your ability to qualify for a mortgage. But for some, changing jobs during the loan application process might raise concern and hinder your application.
Don't take your accounts to a new bank or move around your finances. As your lending institution considers your mortgage application, you will probably be asked to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market accounts and other liquid assets. To avoid fraud, lenders need a clear and consistent picture of how you earn your living and where any additional funds come from. Even for innocent reasons, moving around cash or switching banks may make it harder for the lending institution to document your bank history.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit belongs to you, not the seller up until closing. A FSBO seller might not realize that your good faith funds is to be applied to your expenses upon closing. Find a lawyer or other neutral person who will hold the deposit or put it in a trust account until you close. The final disposition of earnest money, if your transaction falls through, should be written in the contract with your seller.
Advantage Home Lenders can answer questions about these "Don'ts" and many others. Call us at 6317360419.