Don't Trip Yourself up While Buying your New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching your finances very closely. We have given you a list of actions below you will want to avoid when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to buy that new easy-chair for the soon-to-be-yours living room, but it's best to stay away from making large buys like furniture, appliances, jewelry, or cars until closing. Using plastic to buy new living room furniture could compromise your lending process by changing your numbers dramatically. It's even a mistake to make those big purchases with cash. Lenders are looking at your available cash when considering your loan.
Don't look for a new career. Consistency in your work history is a good thing to lending institutions. Getting a new job may not affect your ability to qualify for a loan - especially if you are getting a better salary. But for some people, changing careers during the loan approval process could raise concern and affect your application.
Don't switch banks or move finances around in your accounts. Bank statements from the last two or three months for accounts in your name (checking, savings, money market, and other accounts) will be analyzed as the lender makes decisions regarding your approval. To avoid potential fraud, most loans need a detailed paper trail to determine the source of all funds. Changing banks or moving money elsewhere - even if its only to pool funds - might make it harder for your lender to review your funds.
Don't give cash directly to your seller (generally in cases of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although your seller might not realize this, your good faith funds must be used for your closing expenses. It's best to put the funds into a trust account, or get an attorney to hold them until the deal closes. Should your sale fall through, your purchase contract should document where the good faith deposit should go.
At 1st Credential Mortgage Inc, we answer questions about this process every day. Call us at (281) 778-0805.