Don't Trip Yourself up While Buying your New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of carrying their enthusiasm straight to the mall or furniture store. It's best to remember that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to stay away from during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your 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 reviewing your bank accounts, a large cash purchase is also a mistake.
Don't go on a job search. Your recent career history should show stability. Finding a new career (especially one with a better salary) may not hinder your ability to qualify for your mortgage loan. But for some, changing jobs during the loan approval process could bring concern and hinder your approval.
Don't move cash around or change banks. Most lenders will require you to provide recent bank statements on all of your accounts: checking, savings, money market, and other liquid assets. To avoid potential fraud, most lending institutions need detailed paperwork to verify the source of all incoming funds. No matter the reason, moving banks or moving funds from one account to another may raise a red flag with the lender and impede your approval process.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for a "good faith" deposit. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Although some FSBO sellers might not know this, the earnest money must be applied to your closing expenses. We recommend that you put the deposit into a trust account, or get an attorney to hold it until closing. If your home purchase fails, the purchase agreement should indicate where your good faith deposit should go.
Riviera Funding NMLS#861382 CA DRE Broker #01186669 can answer questions about these "Don'ts" and many others. Call us: 3103737406.