Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to buy big-ticket items can even be a bad idea: many banks take into consideration your available cash when approving your mortgage.
Don't go on a job search. Lenders feel comfortable seeing a consistent career history on your paperwork. Finding a new career (especially one with a better salary) may not change your ability to qualify for a mortgage. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't take your accounts to a new bank or move around your finances. Most lenders will instruct the submission of recent bank statements of accounts in your name: checking, savings, money market, and other assets. The lending institution looks for a steady rise and fall of your funds over the month, in the interest of ruling out fraud. No matter the reason, moving banks or transferring money could raise a red flag with your lender and slow down your application process.
Don't give your FSBO (for sale by owner) seller earnest money, delivered to his door. As a rule, your good faith money is yours, not the seller's until the deal closes. Your earnest money is to be applied to your expenses closing; some FSBO sellers might not realize this. You'll need to put the funds into a trust account, or get a neutral party, like a lawyer to hold them until the closing of the sale. Your purchase agreement should document where the funds go if the home purchase does not go through.
At Asset Alliance Mortgage, we answer questions about this process every day. Call us: (760) 632-7701.