Don't Trip Yourself up While Buying your New Home
What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before closing could be trouble. It's wise to remember that until you get the keys, your lender is watching your finances very closely. Below you'll find a list of actions 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, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and vehicle purchases until the closing of your loan. Using plastic to buy new living room furniture could jeopardize your lending process by altering your numbers dramatically. It's also a red flag to make those large purchases using cash. Lenders are examining your cash reserve when considering your loan.
Don't get a new job. Stability in your work history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, getting a new job in the middle of the loan process might influence your approval.
Don't change banks or move cash around in your accounts. Your lending institution will require you to submit recent bank statements of all of your accounts: checking, savings, money market, and other assets. In order to avoid fraud, lenders require a clear and consistent picture of how you earn your living and where additional money comes from. Changing banks or moving money to another account - even if its just to consolidate funds - might make it difficult for the lender to verify your funds.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until closing, any good faith deposit remains yours. Although your seller may not realize this, the good faith money should go toward your closing expenses. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of good faith money, if your sale falls through, should be written in the contract with the seller.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at 2565439211.