Don't Trip Yourself up While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. Keep in mind that until closing, your lender is watching your accounts very closely. Here are some actions to stay clear of before closing to be sure the transaction goes well.
Don't buy big-ticket items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. Using cash to buy big-ticket items can even create a bad idea: most lending institutions take into consideration your cash on hand when approving your application.
Don't get a new career. Lending Institutions feel comfortable seeing a consistent work history on your application forms. Getting a new job may not jeopardize your ability to qualify for a loan - especially if you are going to be making more money. However, if you switch careers before your loan is approved, your loan process could fail or be bogged down.
Don't take your accounts to a new bank or move around your money. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other assets) will be analyzed as the lending institution makes decisions regarding your loan application. The lender will need to see a consistent flow of your funds over the month, in order to avoid fraud. Switching banks or moving finances to another account - for whatever reason - may make it harder for your lender to document your funds.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Until the sale is complete, the good faith money remains yours. Your earnest money is to go toward your expenses closing; some sellers may not understand this. You'll want to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. The final disposition of earnest money, if your home purchase fails, should be indicated in the contract with your seller.
Carter Financial Solutions can walk you through the pitfalls of getting a mortgage. Call us at 866-840-8745 x2.