Don't Trip Yourself up While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before your loan closes. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't buy big-ticket items. It may be tempting to order that new sofa for the soon-to-be-yours den, but it's advisable to avoid making big ticket purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent work history should show consistency. Finding a new job (particularly one with a bigger paycheck) may not change your ability to qualify for your loan. But in some cases, changing jobs during the mortgage approval process could bring concern and stymie your application.
Don't switch banks or move cash around in your bank accounts. Bank statements from the last few months for all of your accounts (checking, savings, money market, and other assets) will likely be analyzed as the lending institution makes decisions regarding your approval. Your lending institution looks for a consistent rise and fall of your funds over the pay period, in order to rule out fraud. Changing banks or moving funds elsewhere - even if its just to pool funds - might make it harder for the lender to verify your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the transaction is final. Some sellers might not know that your good faith funds is to be applied to your expenses upon closing. A neutral party, like an attorney can hold your earnest funds, or you may place them temporarily into a trust account until closing. The contract should dictate who gets the earnest funds if the transaction falls through.
At Alternative Mortgage Group, we answer questions about this process every day. Call us: 561-395-4264.