Don't Trip Yourself up While Buying a New Home
What's better than buying a bunch of new furniture to adorn your future home? Nothing. But making big purchases before closing can be harmful. Until the house is really yours, there are still some hurdles to jump. Here are some things to avoid before closing to assure your transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to order that new easy-chair for the soon-to-be-yours parlor, but it's best to avoid making large buys like furniture, appliances, jewelry, or vacations until your home loan closes. Using plastic to buy new living room furniture could compromise your loan process by altering your numbers dramatically. Since lending institutions are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't go on a job search. Consistency in your job history is a positive thing to lending institutions. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are getting a better salary. However, finding a new career during the loan process might affect your approval.
Don't change banks or move finances around in your bank accounts. As your lender reviews your mortgage loan application, you will probably be required to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid wealth. The lender looks for a steady flow of your money over the month, in the interest of avoiding fraud. Changing banks or moving funds to another account - for whatever reason - could hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the completion of the deal, any earnest money remains yours. Although your FSBO seller might not understand this, your good faith funds should be used for your closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. Should your home purchase fail, your contract with the seller should document where the earnest money should go.
1st Credential Mortgage Inc can walk you through the pitfalls of getting a mortgage. Give us a call at (281) 778-0805.