Don't Trip Yourself up While Buying a New Home
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Many new home buyers make the mistake of rushing out to buy new things for their home soon after the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before your loan closes. We have listed some things below we suggest you avoid when waiting for closing.
Don't throw your money around. You may be itching to buy that new sofa for the soon-to-be-yours living room, but it's best to stay away from making large purchases like furniture, appliances, electronic equipment, or vacations until your home loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Since lending institutions are examining your financial accounts, a large cash purchase is also a bad idea.
Don't look for a new career. Your recent work history should show stability. Finding a new job (especially one with a better paycheck) may not affect your ability to qualify for a mortgage loan. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't move cash around or change banks. Bank statements from the last few months for accounts in your name (savings, checking, money market, and other assets) will probably be analyzed as the lending institution makes decisions regarding your application. To avoid potential fraud, most loans need a thorough paper trail to determine the source of all incoming funds. Switching banks or moving money elsewhere - no matter the purpose - may hinder the documentation of your funds.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Your earnest money does not belong to the seller: it is actually yours until the sale closes. Although your FSBO seller may not understand this, the earnest money must go toward your closing expenses. We recommend that you put the deposit into a trust account, or get a neutral party, like an attorney, to hold it until closing. The contract should dictate who keeps the money if the home purchase does not go through.
Natalya Hill and her team can walk you through the pitfalls of getting a mortgage. Give us a call at 919-614-0388.