Don't Trip Yourself up While Buying a New Home
What's better than buying a bunch of new furnishings to go in your future home? Not much. But buying big ticket items before closing could be trouble. Until your loan closes, there are still some hurdles to jump. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until the closing of your loan. Your lender may send up red flags if you finance your electronics on your credit cards in the middle of your loan process. Because lenders are examining your financial accounts, a large cash purchase is also a bad idea.
Don't get a new job. Lending Institutions feel comfortable seeing a consistent job history on your application forms. Changing jobs may not compromise your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, if you switch careers before you qualify, your process could fail or be slowed down.
Don't switch banks or move money around in your bank accounts. Your lender will ask for recent bank statements of your accounts: savings, checking, money market, and other assets. To eliminate potential fraud, most lenders need detailed paperwork to determine the source of all incoming funds. Changing banks or transferring funds to another account - for whatever reason - might hinder the documentation of your funds.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Until closing, any good faith money actually belongs to you. Your seller may not know that your good faith funds should go toward your expenses upon closing. Get a lawyer or other neutral party who can hang on to the money or place it in a trust account until you close. Your contract should dictate where the deposit goes if the home purchase fails.
Affirm Home Loans can answer questions about these "Don'ts" and many others. Call us: (972) 292-0448.