Don't Trip Yourself up While Buying a Home
What's better than buying a bunch of new stuff to go in your future home? Nothing. But buying big ticket items before closing can be a misstep. It's best to remember that until your keys are in hand, your lender is watching you very closely. Here are some actions to avoid before closing to assure your transaction goes smoothly.
Don't throw your money around. You may be itching to buy that new Turkish rug for the soon-to-be-yours den, but it's best to avoid making large buys like furniture, appliances, jewelry, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Using cash to buy expensive items can also create an issue: most lenders take into consideration your available cash when approving your application.
Don't look for a new job. Your recent job history should show stability. Getting a new career before you apply for a mortgage loan may not jeopardize your approval at all. But for some, changing jobs during the mortgage loan application process could raise concern and hinder your application.
Don't move finances around or change banks. Your lending institution will require you to provide recent bank statements on your accounts: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders will need a consistent portrayal of how you earn your money and where any additional funds come from. Even for innocent purposes, moving around money or switching banks might make it harder for your lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. As a rule, your good faith money belongs to you, not to the seller until the deal closes. Some FSBO sellers may not realize that any good faith funds is to be used for your expenses at closing. We recommend that you put the money into a trust account, or get a neutral party, like an attorney, to hold it until the closing of the sale. Your contract should specify where the money goes if the home purchase fails.
At Riviera Funding, we answer questions about this process every day. Call us: (310) 373-7406.