Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy new things for 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 listed some actions below we suggest you stay away from when waiting for closing.
Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until your loan closes. Financing your Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Using cash to purchase big-ticket items can also be a mistake: most banks consider your available cash when approving your mortgage.
Don't look for a new job. Lenders like to see a consistent job history on your paperwork. Getting a new career before you apply for a loan may not affect your approval at all. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move cash around or change banks. Most lenders will require you to provide recent bank statements on accounts in your name: savings, checking, money market, and other assets. To avoid potential fraud, most loans want a detailed paper trail to determine the source of all cash. No matter the purpose, moving banks or transferring funds can raise a red flag with your lender and slow your approval process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Your good faith funds are to go toward your expenses upon closing; some individual sellers may not understand this. A neutral party, like an attorney can hold onto your earnest funds, or you may place them temporarily into a trust account until closing. If your sale falls through, your contract with the seller should dictate to whom this good faith deposit should go.
At Primemax Mortgage Group, NMLS#195523, we answer questions about this process every day. Call us: 2565439211.