Don't Trip Yourself up While Buying your 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 appliance store. There still remain a few major hurdles to jump before your loan closes. We have given you a list of actions below we suggest you stay away from when waiting for your loan to close.
Don't empty your wallet on big-ticket items Although you will be planning ways to turn your new house into a castle, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you stay away from vacations and vehicle purchases until the closing of your loan. Financing new Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. Using cash to buy big items can also create a problem: most lending institutions consider your cash reserve when approving your loan.
Don't get a new job. Your recent job history should show consistency. Getting a new job before you start the application process for a mortgage loan may not jeopardize your approval at all. However, getting a new job in the middle of the approval process may influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will probably be studied as the lending institution considers your mortgage application. Your lender is looking for a steady rise and fall of your funds over the pay period, in order to avoid fraud. Even for innocent reasons, transferring finances or switching banks could make it difficult for your lender to document your account history.
Don't give cash directly to your seller (generally in the case of of "for sale by owner") for earnest money. Until the sale is complete, the good faith deposit actually belongs to you. Some FSBO sellers might not realize that your good faith funds must be used for your expenses upon closing. Get a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until closing. Your contract should document to whom the money goes if the home purchase fails.
SelectPlus Lending can walk you through the pitfalls of getting a mortgage. Give us a call: 844-773-1401.