Don't Trip Yourself up While Buying your New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller accepts their offer and the lender approves their loan. There are still a few major hurdles to jump before the keys are handed over. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items It may be tempting to buy that new easy-chair for the soon-to-be-yours living room, but it's advisable to stay away from making large purchases like furniture, appliances, electronic equipment, or cars until your home loan closes. Your credit numbers could be altered suddenly if you purchase new furniture using plastic. Using cash to buy big items can even create a problem: most lenders look at your cash reserve when approving your mortgage loan.
Don't look for a new career. Lending Institutions like to see a consistent career history on your application forms. Changing jobs may not jeopardize your ability to qualify for a mortgage loan - particularly if you are getting a bigger paycheck. But for some, changing jobs during the loan application process might raise concern and affect your application.
Don't take your accounts to a new bank or move around your money. Your lending institution will require you to submit recent bank statements for all of your accounts: savings, checking, money market, and other liquid assets. To avoid potential fraud, most loans want a detailed paper trail to determine the source of all cash. No matter the reason, changing banks or transferring funds may raise a red flag with your lender and slow down your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until closing, the earnest money remains yours. The good faith funds are to go toward your expenses closing; some sellers might not know this. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. If your home purchase fails, your contract with the seller should specify to whom the earnest money should go.
At Real Property Finance, we answer questions about this process every day. Call us at 310-379-5997.
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