Don't Trip Yourself up While Buying a Home
What's better than getting a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before your loan closes can be an error. There still remain 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 smoothly.
Don't overspend on big-ticket items You may be tempted to buy that new couch for the soon-to-be-yours den, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or cars until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a job search. Your recent work history should show consistency. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before your loan is approved, your mortgage process could fail or be slowed down.
Don't switch your accounts to a new bank or move around your finances. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be reviewed as the lending institution considers your mortgage application. To avoid fraud, lenders look for clear documentation of how you earn your living and where additional money comes from. Switching banks or moving money to another account - no matter the purpose - might make it harder for the lender to verify your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Until closing, any good faith deposit remains yours. Although your FSBO seller may not realize this, any good faith funds should be applied to the buyer's closing expenses. Find a lawyer or other neutral person who is able to hang on to the funds or place them in a trust account until closing. Should your home purchase fail, your contract with the seller should indicate to whom this good faith funds should go.
Alternative Mortgage Group can answer questions about these "Don'ts" and many others. Give us a call: 561-395-4264.