Don't Trip Yourself up While Buying a Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. It's best to remember that until your keys are in hand, your lender is watching your finances very closely. We have listed some things below you will want to stay away from when waiting for closing.
Don't throw your money around. Although you will be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your loan process by changing your numbers dramatically. Using cash to buy expensive items can also create an issue: most banks look at your available cash when approving your application.
Don't get a new career. Your recent work history should show stability. Finding a new job (especially one with a bigger paycheck) may not change your ability to qualify for your mortgage. But for some, changing jobs during the mortgage loan application process might bring concern and hinder your approval.
Don't move finances around or switch banks. As the lender reviews your loan package, you will probably be asked to provide bank statements for the last two or three months on your saving and checking accounts, money market funds and other liquid assets. To eliminate fraud, lenders need clear documentation of how you earn your money and where any additional money comes from. Even for innocent reasons, transferring money or changing banks could make it more difficult for your lender to confirm your bank history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's up until closing. Some FSBO sellers may not know that any good faith funds must go toward your expenses upon closing. Get an attorney or other neutral party who will hang on to the funds or put them in a trust account until you close. Should your home purchase fail, your contract with the seller should specify to whom your earnest money should go.
At Middleton Website Test Services, we answer questions about this process every day. Give us a call at 4058873713.