Don't Trip Yourself up While Buying a New Home
What's better than getting a bunch of new furnishings to adorn your future home? Not much. But making big purchases before your loan closes can be an error. Until the house is really yours, there still remain some hurdles to jump. We have given you a list of things below we suggest you stay away from when waiting for your loan to close.
Don't throw your money around. It may be tempting to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making big ticket purchases like furniture, appliances, jewelry, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. Using cash to buy expensive items can even create a problem: most lending institutions take into consideration your available cash when approving your application.
Don't get a new job. Lending Institutions like to see a consistent career history on your paperwork. Getting a new job before you apply for a mortgage may not jeopardize your approval at all. However, if you switch careers before your loan is approved, your loan process could fail or be slowed down.
Don't move finances around or switch banks. Most lenders will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. The lender needs to see a steady flow of your funds each pay period, in order to rule out fraud. No matter the purpose, changing banks or moving funds from one account to another can raise a red flag with the lender and slow down your loan process.
Don't give funds directly to your seller (generally in cases of "for sale by owner") for earnest money. As a rule, your good faith deposit belongs to you, not the seller until the deal closes. Any good faith funds are to go toward your expenses closing; the FSBO seller might not know this. It's wise to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The contract should indicate where the funds go if the transaction falls through.
Queen City Mortgage Company, LLC can answer questions about these "Don'ts" and many others. Call us at 5137966020.