Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to buy that new Turkish rug for the soon-to-be-yours den, but it's best to stay away from making large buys like furniture, appliances, jewelry, or cars until closing. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness 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 available cash when considering your loan.
Don't look for a new career. Lending Institutions feel comfortable seeing a consistent career history on your application forms. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. But for some people, changing careers during the mortgage loan approval process might bring concern and hinder your application.
Don't take your accounts to a new bank or move around your money. As your lender reviews your loan application, you will probably be asked to provide bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid finances. To avoid potential fraud, most lending institutions want a detailed paper trail to verify the source of all incoming funds. Switching banks or moving money to another account - for whatever reason - could make it harder for your lender to document your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it remains yours until the sale closes. Your FSBO seller might not realize that the earnest money must go toward your expenses at closing. It's best to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. If your transaction fails, the purchase contract should indicate where your good faith funds should go.
Asset Alliance Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: (760) 632-7701.