Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Keep in mind that until your keys are in hand, your lender is watching your accounts very closely. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to purchase big-ticket items can even be a mistake: many lending institutions consider your available cash when approving your mortgage loan.
Don't get a new career. Your recent job history should show consistency. Finding a new job (especially one with a better paycheck) may not jeopardize your ability to qualify for your mortgage. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't change banks or move money around in your accounts. While the lending institution considers 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. To eliminate potential fraud, most lenders want a detailed paper trail to determine the source of all incoming funds. Switching banks or transferring funds elsewhere - for whatever purpose - might hinder the documentation of your accounts.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, the good faith deposit actually belongs to you. Although your FSBO seller may not realize this, your earnest money must be used for your closing expenses. Find an attorney or other neutral party who can hang on to the money or place it in a trust account until closing. The contract should dictate who gets the earnest funds if the transaction does not go through.
Alternative Mortgage Group can answer questions about these "Don'ts" and many others. Give us a call at 561-395-4264.