Don't Trip Yourself up While Buying your New Home
What's better than buying a bunch of new stuff to adorn your future home? Not much. But making large purchases before your loan closes can be harmful. There are still a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't overspend on big-ticket items Although you will be listing ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until your loan closes. You may send up red flags with your lender if you purchase new furniture on your credit cards during your loan process. Because lending institutions are perusing your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Lenders like to see a consistent career history on your application forms. Finding a new career (particularly one with a bigger salary) may not jeopardize your ability to qualify for a loan. However, switching jobs during your approval process might influence whether or not you are approved.
Don't take your accounts to a new bank or move around your cash. Most lenders will instruct the submission of recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders look for a consistent portrayal of how you earn your living and where additional wealth comes from. No matter the purpose, moving banks or moving money from one account to another might raise a red flag with the lender and slow down your application process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Your earnest funds are to be applied to your expenses upon closing; some individual sellers might not understand this. An attorney or other type of neutral party can hold onto your funds, or you may place them temporarily into a trust account until closing. If your home purchase fails, your contract with the seller should specify where your earnest money should go.
Brimor National Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 949-544-4908.
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