Don't Trip Yourself up While Buying your Home
Some 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 loan is approved. Keep in mind that until your keys are in hand, your lender is watching you very closely. We have listed some actions below we suggest you stay away from when waiting for closing.
Don't empty your wallet on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you avoid vacations and car purchases until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by changing your numbers dramatically. Using cash to purchase big items can even be an issue: most lenders look at your cash reserve when approving your application.
Don't get a new job. Consistency in your work history is a positive thing to banks and other lenders. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, switching jobs during your loan process might influence whether or not you are approved.
Don't change banks or move cash around in your accounts. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and other assets) will probably be reviewed as the lender considers your application. The lending institution needs to see a consistent rise and fall of your money each pay period, in the interest of avoiding fraud. Even for innocent reasons, transferring finances or switching banks may make it harder for the lending institution to confirm your account history.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until closing, the earnest money remains yours. Although your seller may not realize this, the earnest money should go toward the buyer's closing expenses. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. Should your sale fall through, the purchase contract should specify where this earnest money should go.
Marc Moser / NMLS# 232625 / Licensed in Florida can answer questions about these "Don'ts" and many others. Call us at 727-466-4301.