Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller says "yes" and the loan is approved. It's wise to remember that until your keys are in hand, your lender is watching you very closely. We have given you a list of actions below you will want to stay away from when waiting for your loan to close.
Don't make expensive purchases. It may be tempting to buy that new easy-chair for the soon-to-be-yours living room, but it's best to stay away from making big ticket buys like furniture, appliances, jewelry, or cars until your home loan closes. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Using cash to buy expensive items can even create an issue: most lenders consider your available cash when approving your loan.
Don't go on a job search. Your recent job history should show consistency. Finding a new job (particularly one with a bigger paycheck) may not affect your ability to qualify for your mortgage loan. But for some, getting a new job during the mortgage loan application process could bring concern and affect your approval.
Don't change banks or move cash around in your accounts. Your lender will ask for recent bank statements on all of your accounts: checking, savings, money market, and other assets. To eliminate potential fraud, most lending institutions want thorough paperwork to document the source of all incoming funds. Even for innocent reasons, moving around money or switching banks may make it difficult for your lending institution to confirm your account history.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it remains yours until closing. Although your seller might not know this, your good faith money must go toward the buyer's closing expenses. Find an attorney or other neutral party who is able to hold the funds or place them in a trust account until you close. The final disposition of good faith money, if your sale fails, should be specified in the purchase agreement with your seller.
Stepping Stone Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (541) 683-3300.