Don't Trip Yourself up While Buying a Home
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What's better than buying a bunch of new furniture to go in your future home? Not much. However, buying big-ticket items prior to your loan closes could be trouble. It's wise to remember that until you get the keys, your lender is watching your finances very closely. We have listed some things below we suggest you 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 expensive furnishings. You will also want to stay away from vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using credit cards. Using cash to buy big-ticket items can also create a mistake: most lenders take into consideration your available cash when approving your application.
Don't go on a career search. Lending Institutions feel comfortable seeing a consistent career history on your paperwork. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are getting a better salary. However, switching jobs in the middle of the approval process might influence whether or not you are approved.
Don't move money around or change banks. Your lending institution will require you to produce recent bank statements of accounts in your name: savings, checking, money market, and other assets. The lender will need to see a steady flow of your money each pay period, in the interest of ruling out fraud. Changing banks or transferring money elsewhere - no matter the purpose - may hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith deposit is yours, not the seller's up until closing. Some FSBO sellers might not know that this good faith money should go toward your expenses upon closing. We recommend that you put the funds into a trust account, or get an attorney to hold them until the deal closes. If your transaction fails, your purchase contract should specify where this good faith funds should go.
Best Capital Funding can answer questions about these "Don'ts" and many others. Give us a call: 909-358-4090.