Don't Trip Yourself up While Buying a Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. Until your keys are in hand, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but stay away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by distorting your numbers. Since lenders are looking closely at your bank accounts, a large cash purchase is also not advised.
Don't look for a new job. Stability in your career history is a good thing to banks and other lenders. Getting a new job before you start the application process for a mortgage may not compromise your approval at all. But for some people, switching jobs during the loan application process might raise concern and affect your approval.
Don't switch banks or move money around in your bank accounts. As your lending institution reviews your mortgage package, you will likely be instructed to produce bank statements for recent months for your checking and savings accounts, money market accounts and other liquid assets. In order to eliminate fraud, lenders require a consistent portrayal of how you earn your money and where any additional wealth comes from. No matter the reason, changing banks or moving money from one account to another could raise a red flag with your lender and slow your qualification process.
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 is yours, not the seller's up until the sale is final. Your seller might not know that these good faith funds must be applied to your expenses at closing. A neutral party, like an attorney can hold your earnest money, or you may put it temporarily into a trust account until you close. The disposition of good faith money, if your transaction fails, should be written in the contract with the seller.
Stepping Stone Mortgage can answer questions about these "Don'ts" and many others. Call us at (541) 683-3300.