Don't Trip Yourself up While Buying a Home
What's better than getting a bunch of new furniture to go in your future home? Not much. But buying big ticket items before your loan closes could be trouble. Until closing, there still remain some hoops to jump through. We have listed some things below you will want to stay away from when waiting for your loan to close.
Don't throw your money around. You may be tempted to buy that new Turkish rug for the soon-to-be-yours parlor, but it's advisable to stay away from making large purchases like furniture, appliances, jewelry, or cars until your home loan closes. Your credit numbers could change suddenly if you make a huge purchase using plastic. It's even a mistake to make those big purchases with cash. Lending Institutions are looking at your available cash when considering your loan.
Don't get a new career. Stability in your job history is a positive thing to banks and other lenders. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - especially if you are going to be making more money. However, switching jobs in the middle of the application process may affect whether or not you are approved.
Don't switch your accounts to a new bank or move around your cash. Most lenders will require you to produce recent bank statements on your accounts: savings, checking, money market, and other assets. To eliminate fraud, lenders look for a consistent portrayal of how you earn your living and where additional money comes from. Switching banks or transferring finances to another account - no matter the purpose - may make it harder for the lender to review your funds.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") to be considered a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. The good faith money is to go toward your expenses closing; some sellers may not realize this. Get a lawyer or other neutral party who can hang on to the money or place it in a trust account until you close. Your purchase agreement should dictate who keeps the earnest funds if the transaction does not go through.
Absolute Mortgage, a Division of Finance of America Mortgage, LLC can answer questions about these "Don'ts" and many others. Call us at 253-848-1255.