Don't Trip Yourself up While Buying a New Home
What's better than buying a bunch of new furnishings to adorn your future home? Nothing. But buying big ticket items before your loan closes could be trouble. There still remain a few major hurdles to jump before your loan closes. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't buy big-ticket items. Although you may be planning ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. Using credit cards to buy new living room furniture could compromise your lending process by altering your numbers dramatically. It's also a red flag to make those huge purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't look for a new career. Lending Institutions like to see a consistent career history on your paperwork. Finding a new career (particularly one with a better paycheck) may not affect your ability to qualify for a mortgage. But in some cases, changing careers during the loan approval process could bring concern and hinder your approval.
Don't move money around or switch banks. 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 lending institution makes decisions regarding your application. To detect potential fraud, most lending institutions require a thorough paper trail to determine the source of all funds. No matter the reason, moving banks or transferring funds could raise a red flag with your lender and slow down your approval process.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until the sale is complete, the good faith deposit remains yours. Your earnest money is to go toward your expenses upon closing; some sellers may not know this. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. The final disposition of good faith money, if your home purchase falls through, should be specified in the purchase agreement with the seller.
Saab Mortgage can answer questions about these "Don'ts" and many others. Give us a call: 703-288-0777.
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