Don't Trip Yourself up While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Keep in mind that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a showplace, avoid major purchases like appliances, electronics, or expensive furnishings. You will also want to stay away from vacations and car purchases until your loan closes. Using credit cards to buy furniture could jeopardize your loan process by distorting your numbers. Using cash to buy big-ticket items can also be a bad idea: most banks consider your cash reserve when approving your mortgage loan.
Don't look for a new career. Lending Institutions like to see a consistent work history on your paperwork. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, if you switch careers before approval, your mortgage process could fail or be slowed down.
Don't move cash around or change banks. While your lending institution considers your mortgage loan application, you will likely be required to produce bank statements for the last two or three months on your saving and checking accounts, money market accounts and other liquid wealth. To eliminate fraud, lenders look for clear documentation of how you earn your living and where any additional money comes from. Even for practical reasons, moving around finances or switching banks could make it more difficult for the lender to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. The good faith funds are to go toward your expenses closing; your individual seller may not know this. An attorney or other type of neutral party can hold your deposit, or you may put it temporarily into a trust account until closing. The contract should indicate where the money goes if the home purchase does not go through.
Riviera Funding can answer questions about these "Don'ts" and many others. Call us: (310) 373-7406.