Don't Trip Yourself up While Buying your New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. Until closing, there still remain some hurdles to jump. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items You may be itching to order that new Turkish rug for the soon-to-be-yours parlor, but it's best to avoid making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. You may send up red flags with your lender if you buy new appliances on your credit cards during your loan process. Using cash to buy expensive items can even be a bad idea: most lending institutions look at your cash reserve when approving your loan.
Don't get a new job. Your recent job history should show consistency. Getting a new job may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before you qualify, your process could fail or be bogged down.
Don't switch your accounts to a new bank or move around your cash. Most lenders will require you to provide recent bank statements of all of your accounts: checking, savings, money market, and other liquid assets. Your lending institution looks for a consistent flow of your money each month, in order to avoid fraud. No matter the reason, switching banks or transferring money might raise a red flag with your lender and slow down your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any earnest money actually belongs to you. The FSBO seller might not realize that any good faith funds must be applied to your expenses upon closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. Should your sale fall through, your purchase contract should dictate to whom this good faith deposit should go.
At REDDISH BULL FINANCE, INC. | NMLS #1247892, we answer questions about this process every day. Give us a call at 561-475-2281.