Don’t Trip Yourself up While Buying your Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says “yes” and the lender approves the loan. Until your loan closes, there are still some hurdles to jump. We have listed some actions below you will want to avoid when waiting for closing.
Don’t overspend on big-ticket items Although you will be listing ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. It’s also a red flag to make those huge purchases with cash. Lenders are looking at your cash reserve when considering your loan.
Don’t look for a new career Consistency in your career history is a good thing to lenders. Getting a new job may not affect your ability to qualify for a loan – especially if you are going to be making more money. But for some people, changing jobs during the mortgage loan approval process may raise concern and affect your approval.
Don’t move finances around or switch banks. While the lender considers your mortgage package, you will probably be asked to produce bank statements for the last two or three months on your checking accounts, savings accounts, money market accounts and other liquid assets. To detect potential fraud, most lenders need a thorough paper trail to document the source of all funds. Even for practical reasons, transferring finances or switching banks may make it more difficult for the lending institution to document your bank history.
Don’t give your FSBO (for sale by owner) seller earnest money, delivered to his door. Your earnest money does not belong to the seller: it is actually yours until the transaction is final. Although your FSBO seller may not know this, any earnest money must be used for the buyer’s closing expenses. Get an attorney or other neutral party who will hold the funds or put them in a trust account until you close. The disposition of good faith money, if your transaction falls through, should be included in the contract with your seller.