Don't Trip Yourself up While Buying your New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. There still remain a few major hurdles to jump before the keys are handed over. Here are some actions to stay clear of before closing to assure your transaction goes well.
Don't overspend on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours parlor, but it's best to stay away from making big ticket purchases like furniture, appliances, electronic equipment, or vacations until closing. Your lender may send up red flags if you purchase new furniture on your credit cards in the middle of your loan process. It's also a bad idea to make those huge purchases using cash. Lending Institutions are looking at your cash reserve when considering your loan.
Don't go on a career search. Lenders look for a consistent work history on your paperwork. Getting a new job before you start the application process for a loan may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move finances around or switch banks. As your lending institution reviews your mortgage application, you will probably be required to submit bank statements for the last few months for your checking and savings accounts, money market funds and other liquid wealth. To eliminate fraud, lenders require a clear and consistent picture of how you earn your living and where additional wealth comes from. No matter the purpose, changing banks or moving funds from one account to another could raise a red flag with the lender and slow your approval process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith deposit belongs to you, not to the seller up until closing. Your earnest money is to be used for your expenses closing; the FSBO seller may not realize this. Get an attorney or other neutral person who can hang on to the funds or put them in a trust account until you close. The final disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
Primemax Mortgage Group, NMLS#195523 can answer questions about these "Don'ts" and many others. Call us at 2565439211.