Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the loan is approved. There still remain a few major hurdles to jump before your loan closes. Here are some things to refrain from during the home buying process to assure your transaction goes smoothly.
Don't buy luxury items. Although you may be dreaming of ways to turn your new home into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lenders are looking closely at your financial accounts, a large cash purchase is also a mistake.
Don't get a new job. Consistency in your work history is a positive thing to lending institutions. Finding a new career (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for your loan. But for some, switching jobs during the mortgage application process may bring concern and stymie your approval.
Don't change banks or move money around in your bank accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lender makes decisions regarding your mortgage application. To detect potential fraud, most lenders want a thorough paper trail to verify the source of all incoming funds. No matter the purpose, changing banks or transferring funds could raise a red flag with the lender and slow down your qualification process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. Until closing, the good faith deposit remains yours. Although your seller may not know this, any good faith money must be applied to your closing expenses. A neutral party, like an attorney can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. If your sale falls through, your purchase agreement should document to whom this good faith deposit should go.
At Financial Edge Mortgage Corp., we answer questions about this process every day. Call us: 425-508-9988.
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