Don't Trip Yourself up While Buying your New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. Until your loan closes, there are still some hoops to jump through. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't buy big-ticket items. It may be tempting to order that new couch for the soon-to-be-yours parlor, but it's best to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Since lenders are perusing your financial accounts, a large cash purchase is also a mistake.
Don't look for a new job. Stability in your work history is a good thing to lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a better salary. However, getting a new job in the middle of your approval process might influence your approval.
Don't switch your accounts to a new bank or move around your cash. As your lending institution reviews your mortgage loan package, you will likely be required to provide bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid assets. Your lender will need to see a consistent flow of your funds each month, in order to avoid fraud. Switching banks or transferring finances elsewhere - no matter the purpose - could hinder the documentation of your funds.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, the earnest money remains yours. Your good faith funds are to go toward your expenses upon closing; some sellers may not realize this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. Your purchase contract should specify to whom the funds go if the home purchase fails.
At The Mortgage Exchange Service LLC, we answer questions about this process every day. Give us a call: 7032555810.