Don't Trip Yourself up While Buying a Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing can be a misstep. Until closing, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't throw your money around. 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 your loan closes. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Because lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't get a new job. Consistency in your career history is a good thing to lending institutions. Finding a new job (particularly one with a bigger salary) may not jeopardize your ability to qualify for your mortgage loan. However, finding a new career in the middle of your loan process may affect whether or not you are approved.
Don't change banks or move money around in your accounts. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other accounts) will be analyzed as the lending institution makes decisions regarding your loan application. To eliminate potential fraud, most lending institutions want detailed paperwork to verify the source of all cash. No matter the reason, changing banks or transferring funds can raise a red flag with the lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit is yours, not the seller's until the deal closes. Some FSBO sellers may not realize that any good faith money should go toward your expenses upon closing. We recommend that you put the money into a trust account, or get an attorney to hold it until closing. The contract should document who keeps the money if the home purchase fails.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call at (281) 778-0805.