Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until closing, your lender is watching you very closely. Here are some actions to stay clear of before closing to assure your transaction goes well.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Financing your bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. It's also a mistake to make those large purchases with cash. Lenders are examining your cash on hand when considering your loan.
Don't get a new job. Lenders look for a consistent career history on your application. Finding a new career (especially one with a better salary) may not change your ability to qualify for a mortgage. However, finding a new job during your loan process may influence your approval.
Don't move finances around or change banks. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other accounts) will probably be reviewed as the lending institution makes decisions regarding your application. To detect fraud, lenders look for a consistent portrayal of how you earn your living and where any additional wealth comes from. No matter the purpose, changing banks or moving money from one account to another may raise a red flag with your lender and impede your qualification process.
Don't hand over earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until closing. Some FSBO sellers may not realize that this earnest money must be used for your expenses upon closing. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until closing. If your home purchase fails, your purchase agreement should dictate to whom your good faith deposit should go.
Alternative Mortgage Group can answer questions about these "Don'ts" and many others. Call us: 561-395-4264.