Don't Trip Yourself up While Buying a Home
What's more fun than getting a bunch of new furniture to adorn your future home? Not much. But making big purchases before your loan closes could be trouble. Until closing, there are still some hurdles to jump. Here are some things to refrain from during the home buying process to be sure the transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but stay away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. You may send up red flags with your lender if you finance your electronics on your credit cards during your loan process. Since lenders are perusing your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Stability in your career history is a positive thing to lending institutions. Getting a new career before you apply for a loan may not compromise your approval at all. However, switching jobs in the middle of your application process might affect your approval.
Don't move finances around or switch banks. Your lending institution will require you to produce recent bank statements on your accounts: savings, checking, money market, and other assets. To eliminate potential fraud, most lenders require a detailed paper trail to document the source of all incoming funds. Even for innocent reasons, transferring money or switching banks could make it difficult for the lending institution to document your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the completion of the deal, any good faith money actually belongs to you. Any good faith funds are to be used for your expenses closing; some individual sellers might not realize this. Get a lawyer or other neutral party who is able to hang on to the funds or put them in a trust account until closing. Should your sale fall through, your purchase agreement should document to whom your good faith deposit should go.
Financial Edge Mortgage Corp. can answer questions about these "Don'ts" and many others. Call us: 425-508-9988.
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