Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the keys are handed over, there still remain some hoops to jump through. We have given you a list of things below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Using cash to purchase big items can also be a bad idea: many banks consider your available cash when approving your mortgage.
Don't look for a new career. Lenders feel comfortable seeing a consistent career history on your application forms. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a better salary. But for some people, switching jobs during the mortgage application process could bring concern and hinder your application.
Don't switch banks or move money around in your accounts. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other assets) will be reviewed as the lending institution considers your mortgage application. In order to avoid fraud, lenders require clear documentation of how you earn your living and where any additional money comes from. No matter the reason, switching banks or transferring funds might raise a red flag with your lender and slow your loan process.
Don't give money directly to your seller (generally in cases of "for sale by owner") to be used as a "good faith" deposit. As a rule, your good faith deposit is yours, not the seller's up until the sale is final. Your FSBO seller may not realize that the good faith money should be applied to your expenses at closing. It's wise to put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. The disposition of good faith funds, in the case of a failed transaction, should be included in the purchase agreement with your seller.
Mortgage Max Inc can answer questions about these "Don'ts" and many others. Give us a call at 760-547-2080.