Don't Trip Yourself up While Buying your New Home
What's more fun than buying a bunch of new furnishings to adorn your future home? Nothing. But making big ticket purchases before closing could be trouble. There still remain a few major hurdles to jump before closing. Here are some actions to stay clear of during the home buying process to assure your transaction goes well.
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 castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until closing. Financing your stainless steel appliances 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 even a bad idea to make those big purchases using cash. Lending Institutions are examining your cash reserve when considering your loan.
Don't get a new career. Your recent job history should show stability. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, if you switch careers before approval, your loan process could fail or be stalled.
Don't move money around or change banks. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will probably be analyzed as the lender makes decisions regarding your loan application. Your lender hopes to see a steady flow of your funds each month, in the interest of avoiding fraud. No matter the purpose, switching banks or transferring funds may raise a red flag with your lender and slow your loan process.
Don't give funds directly to your seller (usually in cases of "for sale by owner") for a "good faith" deposit. Your good faith money does not belong to the seller: it remains yours until closing. Although your FSBO seller may not realize this, any good faith money should go toward the buyer's closing expenses. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until you close. Your contract should specify where the money goes if the transaction does not go through.
Americn Hero Mortgage can answer questions about these "Don'ts" and many others. Give us a call at 754-202-4376.