Don't Trip Yourself up While Buying your Home
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What's more fun than buying a bunch of new furnishings to go in your future home? Not much. But making big-ticket purchases prior to closing can be a mistake. There still remain a few major hurdles to jump before closing. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be itching to turn your new living room into a home magazine cover, or celebrate your new dream home, but keep away from big purchases like furniture, cars, appliances, or vacations until closing. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. It's even a mistake to make those big-ticket purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't go job hunting. Your recent career history should show stability. Finding a new career (especially one with a bump in salary) may not change your ability to qualify for a loan. However, if you switch careers before approval, your mortgage process could fail or be stalled.
Don't move money around or change banks. While the lender considers your loan application, you will likely be asked to submit bank statements for the last two or three months for your checking and savings accounts, money market funds and other liquid assets. To avoid fraud, lenders require a consistent portrayal of how you earn your living and where any additional funds come from. Changing banks or transferring finances to another account - for whatever reason - may hinder the documentation of your accounts.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any earnest money remains yours. Your good faith funds are to go toward your expenses closing; your FSBO seller might not understand this. Get a lawyer or other neutral party who will hold the funds or put them in a trust account until closing. The disposition of good faith funds, if your transaction falls through, should be included in the contract with the seller.
Mac 5 Mortgage can answer questions about these "Don'ts" and many others. Call us: 970-625-8686.