Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves the loan. There are still a few major hurdles to jump before your loan closes. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't throw your money around. You may be tempted to buy that new sofa for the soon-to-be-yours parlor, but it's advisable to avoid making major buys like furniture, appliances, jewelry, or cars until your home loan closes. Using plastic to buy furniture could jeopardize your lending process by altering your numbers dramatically. It's also a mistake to make those huge purchases using cash. Lenders are looking at your cash reserve when considering your loan.
Don't get a new job. Lenders like to see a consistent career history on your paperwork. Changing jobs may not jeopardize your ability to qualify for a loan - especially if you are getting a better salary. But for some, changing jobs during the mortgage loan approval process may raise concern and stymie your application.
Don't switch your accounts to a new bank or move around your cash. As your lender reviews your mortgage application, you will likely be asked to submit bank statements for the last few months on your checking and savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most lenders want thorough paperwork to verify the source of all funds. Switching banks or transferring finances elsewhere - for whatever purpose - might hinder the review of your accounts.
Don't give money directly to your seller (commonly in cases of "for sale by owner") to be considered a "good faith" deposit. Until the completion of the deal, any good faith deposit remains yours. Any good faith funds are to go toward your expenses closing; some individual sellers might not realize this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until closing. Your purchase contract should indicate to whom the deposit goes if the home purchase does not go through.
At Asset Alliance Mortgage, we answer questions about this process every day. Give us a call: (760) 632-7701.