Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the loan is approved. There are still a few major hurdles to jump before the house is realy yours. We have given you a list of things below you will want to avoid when waiting for closing.
Don't throw your money around. You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until your loan closes. You may send up red flags with your lender if you finance your furniture on your credit cards in the middle of your loan process. It's even a bad idea to make those big-ticket purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't look for a new job. Lending Institutions like to see a consistent work history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. However, getting a new job during the application process may affect whether or not you are approved.
Don't move finances around or change banks. Your lending institution will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. The lender is looking for a consistent rise and fall of your funds over the pay period, in order to rule out fraud. No matter the reason, changing banks or moving funds from one account to another can raise a red flag with your lender and slow down your application process.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered earnest money. Your earnest money does not belong to the seller: it remains yours until the sale closes. The good faith funds are to be applied to your expenses upon closing; some individual sellers may not understand this. We recommend that you put the funds into a trust account, or get an attorney to hold them until closing. Your purchase agreement should specify who keeps the earnest funds if the transaction does not go through.
Brimor National Mortgage can answer questions about these "Don'ts" and many others. Call us at 949-544-4908.
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