Don't Trip Yourself up While Buying a Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But making big ticket purchases before closing can be an error. Keep in mind that until your keys are in hand, your lender is watching you very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't throw your money around. Although you will be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. You will also want to avoid vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you buy your furniture on your credit cards during your loan process. Since lenders are examining your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Consistency in your career history is a good thing to lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are improving your salary. But for some, changing careers during the loan application process may bring concern and stymie your approval.
Don't take your accounts to a new bank or move around your finances. While the lender reviews your loan application, you will likely be instructed to provide bank statements for the last few months on your checking accounts, savings accounts, money market funds and other liquid wealth. Your lending institution is looking for a consistent rise and fall of your funds each month, in the interest of ruling out fraud. Switching banks or moving funds to another account - even if its merely to consolidate funds - might make it harder for the lender to review your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until the sale closes. Any good faith money is to go toward your expenses closing; some sellers might not understand this. An attorney or other type of neutral party can hold your earnest money, or you may put it temporarily into a trust account until you close. The disposition of earnest funds, if your sale fails, should be documented in the contract with the seller.
1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call at (281) 778-0805.