Things to Avoid While Buying a Home
What's more fun than getting a bunch of new furniture to adorn your future home? Not much. But buying big ticket items before closing could be trouble. There are still a few major hurdles to jump before the keys are handed over. Here are some things to stay clear of during the home buying process to be sure the transaction goes well.
Don't make expensive purchases. Although you will be dreaming of ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to purchase big-ticket items can also be a bad idea: most banks take into consideration your cash reserve when approving your application.
Don't look for a new job. Lending Institutions look for a consistent work history on your application. Finding a new career (especially one with a bigger salary) may not change your ability to qualify for a mortgage loan. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move money around or change banks. As the lending institution considers your mortgage package, you will probably be instructed to provide bank statements for the last few months for your checking and savings accounts, money market accounts and other liquid finances. To avoid potential fraud, most lending institutions need thorough paperwork to document the source of all incoming funds. Even for practical reasons, moving around finances or switching banks could make it more difficult for the lending institution to document your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith money does not belong to the seller: it is actually yours until the transaction is final. Your FSBO seller might not know that this good faith money is to be used for your expenses at closing. An attorney or other type of neutral party can hold onto your funds, or you may put them temporarily into a trust account until closing. Your purchase contract should document who keeps the deposit if the transaction falls through.
Financial Edge Mortgage Corp. can walk you through the pitfalls of getting a mortgage. Call us: 425-508-9988.
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