Don't Trip Yourself up While Buying your New Home
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What's better than getting a bunch of new stuff to adorn your future home? Not much. However, 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 actions to stay clear of before closing to be sure your transaction goes well.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, electronics, appliances, or vacations until closing. Your lender may send up red flags if you purchase your electronics on your credit cards during your loan process. Using cash to purchase big items can also create a bad idea: many lenders consider your available cash when approving your mortgage loan.
Don't look for a new career Consistency in your job history is a positive thing to lenders. Getting a new job before you start the application process for a loan may not affect your approval at all. But in some cases, switching jobs during the mortgage loan approval process might bring concern and hinder your approval.
Don't take your accounts to a new bank or move around your finances. As your lending institution reviews your mortgage loan package, you will probably be required to submit bank statements for the last two or three months on your checking and savings accounts, money market accounts and other liquid wealth. Your lender looks for a steady flow of your funds over the pay period, in the interest of avoiding fraud. Even for innocent reasons, moving around cash or changing banks may make it more difficult for the lending institution to document your account history.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the good faith deposit remains yours. Although your FSBO seller may not understand this, the good faith money should be used for your closing expenses. Find an attorney or other neutral party who will hold the deposit or put it in a trust account until you close. The purchase agreement should dictate who keeps the deposit if the transaction falls through.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us: 561-395-4264.