Don't Trip Yourself up While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until the house is really yours, there are still some hoops to jump through. We have given you a list of actions below we suggest you avoid when waiting for closing.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, cars, appliances, or vacations until closing. Financing new furniture with a store card or a bank credit card could put your credit worthiness at risk during the time it means the most. Using cash to purchase big items can even create an issue: many banks look at your cash reserve when approving your loan.
Don't get a new job. Your recent career history should show consistency. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, switching jobs during your loan process could affect your approval.
Don't move finances around or switch banks. Your lender will ask for recent bank statements of all of your accounts: checking, savings, money market, and other assets. The lender wants to see a consistent rise and fall of your funds over the pay period, in order to avoid fraud. No matter the reason, moving banks or moving money from one account to another can raise a red flag with your lender and impede your application process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your earnest money belongs to you, not to the seller up until the sale is final. Any good faith money is to go toward your expenses upon closing; your individual seller may not know this. We recommend that you put the deposit into a trust account, or get an attorney to hold it until closing. The 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. Call us: (541) 683-3300.