Don't Trip Yourself up While Buying your Home
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What's more fun than buying a bunch of new stuff to go in your future home? Not much. But buying big ticket items before closing could be trouble. Until your loan closes, there still remain some hurdles to jump. We have listed some actions below you will want to avoid when waiting for closing.
Don't buy big-ticket items. Although you may be dreaming of ways to turn your new home into a showplace, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and vehicle purchases until your loan closes. Your lender may send up red flags if you finance new appliances on your credit cards in the middle of your loan process. It's also a bad idea to make those large purchases with cash. Lending Institutions are examining your available cash when considering your loan.
Don't go on a job search. Lenders like to see a consistent job history on your application forms. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are going to be making more money. However, switching jobs in the middle of the loan process might affect whether or not you are approved.
Don't move finances around or change banks. Bank statements from recent months for all of your accounts (savings, checking, money market, and other assets) will be analyzed as the lending institution considers your mortgage application. Your lender is looking for a steady flow of your money over the pay period, in order to avoid fraud. No matter the reason, moving banks or transferring funds may raise a red flag with the lender and impede your approval process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith money does not belong to the seller: it remains yours until closing. Your good faith money is to go toward your expenses closing; a individual seller may not understand 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. Your contract should dictate who gets the deposit if the transaction falls through.
Metro Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 866-300-1550.