Don't Trip Yourself up While Buying a New Home
What's more fun than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before the house is realy yours. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't throw your money around. Although you may be listing ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and car purchases until your loan closes. Financing new bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to purchase expensive items can also create a mistake: many lenders look at your cash on hand when approving your mortgage loan.
Don't look for a new career. Stability in your career history is a positive thing to banks and other lenders. Finding a new career (particularly one with a better salary) may not jeopardize your ability to qualify for a mortgage. However, switching careers in the middle of the loan process could influence whether or not you are approved.
Don't move money around or switch banks. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other assets) will be studied as the lending institution considers your approval. To detect potential fraud, most lending institutions require a thorough paper trail to document the source of all funds. Switching banks or moving funds elsewhere - even if its just to consolidate funds - might hinder the review of your accounts.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. Although some FSBO sellers might not know this, your good faith funds must be applied to the buyer's closing expenses. Get an attorney or other neutral person who will hold the funds or put them in a trust account until you close. If your transaction fails, your purchase agreement should document where this earnest money should go.
REDDISH BULL FINANCE, INC. | NMLS #1247892 can walk you through the pitfalls of getting a mortgage. Give us a call: 561-475-2281.