Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves their loan. Until your loan closes, there still remain some hurdles to jump. We have listed some things below we suggest you stay away from when waiting for closing.
Don't empty your wallet on big-ticket items Although you will be dreaming of 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 car purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Since lenders are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new career. Consistency in your work history is a positive thing to lending institutions. Finding a new job (particularly one with a better paycheck) may not jeopardize your ability to qualify for your mortgage. But for some, switching jobs during the loan application process could raise concern and affect your approval.
Don't move money around or switch banks. Your lender will ask for recent bank statements on your accounts: savings, checking, money market, and other liquid assets. The lending institution looks for a consistent rise and fall of your funds each month, in the interest of avoiding fraud. Changing banks or moving finances to another account - for whatever reason - might hinder the review of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although some individual sellers might not understand this, your good faith money must go toward the buyer's closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. The final disposition of earnest funds, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
At Mortgage Max Inc, we answer questions about this process every day. Give us a call: 760-547-2080.