Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until the keys are handed over, there still remain some hurdles to jump. We have listed some things below you will want to avoid when waiting for closing.
Don't buy big-ticket items. Although you will be planning ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and car purchases until the closing of your loan. Financing new bedroom furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lending institutions are examining your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Stability in your job history is a good thing to lending institutions. Getting a new job may not compromise your ability to qualify for a mortgage loan - particularly if you are improving your salary. However, switching careers in the middle of the application process may influence whether or not you are approved.
Don't move cash around or switch banks. Most lenders will ask for recent bank statements on all of your accounts: checking, savings, money market, and other assets. To detect potential fraud, most loans want a thorough paper trail to verify the source of all cash. Changing banks or moving funds to another account - even if its merely to pool funds - may make it difficult for the lender to verify your funds.
Don't deliver a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the completion of the deal, any good faith deposit remains yours. Your earnest money is to go toward your expenses closing; some sellers may not know this. Find a lawyer or other neutral party who can hang on to the funds or place them in a trust account until you close. If your sale falls through, the purchase agreement should specify to whom this good faith deposit should go.
At F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org), we answer questions about this process every day. Give us a call: 214-300-8756.