Don't Trip Yourself up While Buying a New 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 still remain a few major hurdles to jump before the keys are handed over. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't overspend on big-ticket items Although you will be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until your loan closes. Using plastic to buy furniture could compromise your lending process by distorting your numbers. It's also a mistake to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new career. Consistency in your job history is a positive thing to banks and other lenders. Getting a new job before you start the application process for a loan may not affect your approval at all. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't take your accounts to a new bank or move around your cash. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will probably be studied as the lending institution makes decisions regarding your loan application. Your lender wants to see a consistent rise and fall of your funds over the pay period, in the interest of avoiding fraud. Changing banks or moving money to another account - even if its just to consolidate funds - could hinder the review of your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit actually belongs to you. Some FSBO sellers might not know that this earnest money must go toward your expenses at closing. 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 earnest funds, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
The Reen Team at Direct Mortgage Funding can answer questions about these "Don'ts" and many others. Call us at 4086261879.