Don't Trip Yourself up While Buying a New Home
What's more fun than buying a bunch of new stuff to go in your future home? Nothing. But making big purchases before your loan closes can be a misstep. Until the house is really yours, there are still some hoops to jump through. Below you'll find a list of things to stay away from during this critical 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 castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can also create a problem: most lenders look at your available cash when approving your loan.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent career history on your paperwork. Getting a new job may not affect your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. But in some cases, changing jobs during the mortgage application process could bring concern and affect your approval.
Don't switch banks or move money around in your bank accounts. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will likely be reviewed as the lending institution considers your approval. The lender hopes to see a steady rise and fall of your money each pay period, in the interest of ruling out fraud. Switching banks or moving funds elsewhere - even if its just to consolidate funds - could make it harder for the lender to document your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, the good faith deposit remains yours. Some sellers might not know that these good faith funds should be used for your expenses upon closing. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until closing. The disposition of earnest funds, in the case of a failed transaction, should be included in the contract with your seller.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Call us: (281) 778-0805.