Don't Trip Yourself up While Buying a Home

What's more fun than buying a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until your loan closes, there are still some hurdles to jump. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.

Don't buy big-ticket items. Although you may be planning ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until your loan closes. Using plastic to buy furniture could jeopardize your lending process by changing your numbers dramatically. Using cash to purchase big-ticket items can also be a bad idea: many lenders take into consideration your available cash when approving your mortgage.

Don't look for a new job. Lenders feel comfortable seeing a consistent career history on your paperwork. Finding a new career (particularly one with a bigger paycheck) may not change your ability to qualify for a loan. But in some cases, switching jobs during the mortgage approval process could raise concern and hinder your approval.

Don't move cash around or switch banks. While your lender considers your loan application, you will likely be instructed to provide bank statements for the last few months for your saving and checking accounts, money market accounts and other liquid assets. The lender looks for a steady rise and fall of your money over the month, in order to rule out fraud. No matter the reason, switching banks or moving funds from one account to another could raise a red flag with your lender and slow down your application process.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money actually belongs to you. Any good faith funds are to be used for your expenses closing; some sellers may not realize this. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until you close. The disposition of good faith funds, if your sale fails, should be indicated in the purchase agreement with the seller.

The Reen Team at American Pacific Mortgage can answer questions about these "Don'ts" and many others. Give us a call: (408) 626-1879.

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