Don't Trip Yourself up While Buying your New 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 loan is approved. There still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below you will want to avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to avoid vacations and car purchases until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Since lenders are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new career. Stability in your work history is a good thing to banks and other lenders. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are improving your salary. But in some cases, switching jobs during the loan approval process might bring concern and stymie your approval.
Don't change banks or move finances around in your accounts. Most lenders will instruct the submission of recent bank statements on all of your accounts: checking, savings, money market, and other assets. Your lender looks for a steady flow of your funds each pay period, in order to avoid fraud. No matter the purpose, changing banks or moving funds from one account to another could raise a red flag with the lender and slow down your loan process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") to be used as earnest money. Your good faith money does not belong to the seller: it remains yours until the sale closes. Any good faith funds are to be used for your expenses closing; the individual seller may not understand this. Find a lawyer or other neutral party who is able to hang on to the money or place it in a trust account until closing. The disposition of good faith funds, if your sale fails, should be included in the contract with your seller.
PrimeMax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at (256) 543-9211.