Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't buy luxury items. Although you may be planning ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. You may send up red flags with your lender if you purchase your furniture on your credit cards in the middle of your loan process. Since lending institutions are perusing your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Consistency in your career history is a positive thing to lending institutions. Finding a new job (particularly one with a better salary) may not affect your ability to qualify for a loan. But for some, changing careers during the loan application process might raise concern and hinder your application.
Don't change banks or move finances around in your bank accounts. Your lending institution will instruct the submission of recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. To eliminate potential fraud, most lenders need thorough paperwork to document the source of all funds. No matter the reason, moving banks or transferring money could raise a red flag with your lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your good faith deposit does not belong to the seller: it remains yours until closing. The good faith money is to be applied to your expenses upon closing; a individual seller might not know this. Find a lawyer or other neutral party who is able to hang on to the deposit or place it in a trust account until closing. The final disposition of earnest money, if your transaction falls through, should be documented in the contract with your seller.
Carter Financial Solutions can answer questions about these "Don'ts" and many others. Give us a call: 866-840-8745 x2.