Don't Trip Yourself up While Buying a Home
What's more fun than getting a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes can be an error. It's best to remember that until closing, your lender is watching your accounts very closely. Here are some actions to refrain from during the home buying process to be sure your transaction goes well.
Don't empty your wallet on big-ticket items Although you will be listing ways to turn your new house into a showplace, avoid major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using credit cards. It's also a red flag to make those large purchases with cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a job search. Consistency in your career history is a positive thing to banks and other lenders. Getting a new job before you apply for a loan may not compromise your approval at all. But in some cases, switching jobs during the mortgage loan application process might bring concern and hinder your approval.
Don't move finances around or switch banks. Your lending institution will instruct the submission of recent bank statements for all of your accounts: checking, savings, money market, and other liquid assets. To detect potential fraud, most lenders want a thorough paper trail to determine the source of all funds. Switching banks or moving finances to another account - even if its only to pool funds - may hinder the documentation of your accounts.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. As a rule, your good faith money belongs to you, not to the seller up until the sale is final. Some FSBO sellers might not realize that your good faith money should go toward your expenses upon closing. A neutral party, like an attorney can hang onto your earnest money, or you may put it temporarily into a trust account until you close. If your sale falls through, the contract with the seller should specify to whom your good faith deposit should go.
At Mortgage Headquarters of Missouri, Inc, we answer questions about this process every day. Call us at 5733029990.