Don't Trip Yourself up While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. Until closing, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using credit cards to buy furniture could compromise your loan process by distorting your numbers. Using cash to buy expensive items can also create a problem: many banks consider your available cash when approving your loan.
Don't look for a new career. Your recent career history should show consistency. Getting a new job before you apply for a mortgage may not get in the way of your approval at all. But for some people, getting a new job during the loan application process might bring concern and hinder your application.
Don't move money around or switch banks. Bank statements from the last few months for all of your accounts (savings, checking, money market, and other accounts) will probably be reviewed as the lending institution considers your application. The lender is looking for a steady flow of your funds over the month, in order to avoid fraud. Even for innocent reasons, moving around money or changing banks may make it harder for the lending institution to verify your bank history.
Don't give earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until the sale closes. Some sellers may not realize that this earnest money is to go toward your expenses upon closing. It's advisable to put the money into a trust account, or get an attorney to hold it until the deal closes. The final disposition of good faith money, if your transaction fails, should be written in the purchase agreement with your seller.
Sublime Financial can walk you through the pitfalls of getting a mortgage. Call us: 9722920448.