Don't Trip Yourself up While Buying a New Home
What's more fun than getting a bunch of new furnishings to go in your future home? Not much. But making big purchases before closing could be trouble. Until your keys are in hand, there still remain some hoops to jump through. We have listed some actions below you will want to stay away from when waiting for your loan to close.
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 major purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Since lending institutions are perusing your financial accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent career history should show stability. Changing jobs may not affect your ability to qualify for a loan - especially if you are improving your salary. However, switching jobs in the middle of the application process might affect whether or not you are approved.
Don't change banks or move cash around in your bank accounts. As your lender considers your mortgage loan package, you will likely be instructed to provide bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid finances. To detect fraud, lenders need clear documentation of how you earn your living and where any additional money comes from. Even for innocent purposes, transferring money or switching banks might make it harder for the lender to document your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith money belongs to you, not the seller until the sale is final. Although your seller might not realize this, your good faith money must be used for the buyer's closing expenses. It's advisable to put the money into a trust account, or get an attorney to hold it until the closing of the sale. If your transaction fails, the contract with the seller should specify to whom the good faith deposit should go.
At 1st Credential Mortgage Inc, we answer questions about this process every day. Give us a call at (281) 778-0805.