Don't Trip Yourself up While Buying a Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or furniture store. It's best to remember that until closing, your lender is watching your finances very closely. Below you'll find a list of things to avoid during this critical time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a home magazine cover, or celebrate your new dream home, but stay away from major purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing new Plasma TVs with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Your recent work history should show consistency. Finding a new job (particularly one with a bump in salary) may not jeopardize your ability to qualify for a mortgage. However, switching careers during your approval process could influence your approval.
Don't change banks or move money around in your bank accounts. Your lender will require you to provide recent bank statements for your accounts: checking, savings, money market, and other assets. To avoid potential fraud, most lenders need thorough paperwork to verify the source of all cash. Even for practical purposes, moving around funds or changing banks could make it harder for the lending institution to document your bank history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your good faith money belongs to you, not the seller until the sale is final. Your FSBO seller may not realize that the good faith money is to go toward your expenses upon closing. A neutral party, like an attorney can hold onto your earnest money, or you may put it temporarily into a trust account until closing. The final disposition of earnest funds, in the case of a failed transaction, should be written in the contract with the seller.
Stepping Stone Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (541) 683-3300.