Don't Trip Yourself up While Buying your Home
What's better than getting a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before closing can be a misstep. Keep in mind that until closing, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't throw your money around. You may be tempted to order that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, electronic equipment, or vacations until closing. Your lender may send up red flags if you purchase your appliances on your credit cards in the middle of your loan process. Because lenders are examining your bank accounts, a large cash purchase is also a mistake.
Don't get a new job. Your recent work history should show stability. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a bigger paycheck. However, if you switch careers before approval, your loan process could fail or be bogged down.
Don't move finances around or switch banks. Bank statements from the last two or three months for all of your accounts (checking, savings, money market, and other assets) will probably be studied as the lending institution considers your application. The lender looks for a steady flow of your money each pay period, in the interest of ruling out fraud. Even for practical purposes, transferring finances or switching banks could make it difficult for your lender to verify your bank history.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the earnest money remains yours. Your FSBO seller may not realize that your good faith money is to go toward your expenses at closing. You'll want to put the funds into a trust account, or get a neutral party, like an attorney to hold them until closing. The final disposition of good faith funds, in the case of a failed transaction, should be specified in the purchase agreement with the seller.
The Reen Team at Direct Mortgage Funding can walk you through the pitfalls of getting a mortgage. Call us at 4086261879.