Don't Trip Yourself up While Buying a New Home
What's better than getting a bunch of new furniture to adorn your future home? Not much. But making large purchases before your loan closes can be harmful. Until the keys are handed over, there still remain some hurdles to jump. We have listed some actions below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to buy that new Turkish rug for the soon-to-be-yours living room, but it's best to stay away from making large buys like furniture, appliances, jewelry, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your lending process by distorting your numbers. Because lenders are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't get a new career. Consistency in your work history is a good thing to banks and other lenders. Getting a new job may not compromise your ability to qualify for a loan - especially if you are getting a better salary. However, if you switch careers before your loan is approved, your process could fail or be stalled.
Don't move money around or switch banks. Bank statements from recent months for your accounts (checking, savings, money market, and other accounts) will likely be studied as the lending institution considers your mortgage application. The lending institution is looking for a steady flow of your money each pay period, in the interest of avoiding fraud. Changing banks or moving money elsewhere - for whatever purpose - could make it harder for your lender to verify your funds.
Don't give a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit belongs to you, not the seller up until closing. Your seller may not realize that any good faith funds should be applied to your expenses upon closing. A neutral party, like an attorney can hold onto your deposit, or you may put it temporarily into a trust account until you close. The disposition of good faith funds, if your transaction falls through, should be included in the purchase agreement with the seller.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can walk you through the pitfalls of getting a mortgage. Call us: 3103737406.