Things to Avoid While Buying a New Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from expensive purchases like furniture, cars, appliances, or vacations until the loan closes. Financing your furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lending institutions are perusing your bank accounts, a large cash purchase is also a bad idea.
Don't look for a new job. Your recent career history should show stability. Getting a new job before you start the application process for a mortgage loan may not compromise your approval at all. However, finding a new job during the application process may affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your finances. Your lending institution will require you to produce recent bank statements on your accounts: savings, checking, money market, and other liquid assets. Your lender is looking for a consistent flow of your money each month, in the interest of avoiding fraud. No matter the purpose, moving banks or moving money from one account to another can raise a red flag with the lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, the earnest money remains yours. Any good faith money is to go toward your expenses upon closing; the FSBO seller might not know this. A neutral party, like an attorney can hold your deposit, or you may put it temporarily into a trust account until closing. Your purchase agreement should dictate who keeps the earnest funds if the home purchase falls through.
1st Credential Mortgage Inc can answer questions about these "Don'ts" and many others. Give us a call: (281) 778-0805.