Don't Trip Yourself up While Buying a Home
What's better than getting a bunch of new stuff to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy big-ticket items. You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Using cash to buy big-ticket items can even create a bad idea: most banks consider your available cash when approving your mortgage loan.
Don't look for a new career. Your recent career history should show stability. Finding a new career (especially one with a better paycheck) may not affect your ability to qualify for your mortgage loan. But for some people, changing jobs during the mortgage loan application process may bring concern and hinder your application.
Don't move money around or change banks. As your lending institution considers your mortgage application, you will probably be asked to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid finances. In order to detect fraud, lenders want to see a consistent portrayal of how you earn your money and where additional wealth comes from. Switching banks or transferring funds elsewhere - even if its just to pool funds - might make it difficult for the lender to verify your funds.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be used as a "good faith" deposit. Your earnest money does not belong to the seller: it is actually yours until closing. Your good faith money is to be used for your expenses upon closing; some individual sellers may not know this. Find an attorney or other neutral party who can hold the funds or put them in a trust account until closing. Your contract should dictate to whom the funds go if the transaction fails.
Abundance Home Mortgage can walk you through the pitfalls of getting a mortgage. Call us at (512) 335-7800.