Don't Trip Yourself up While Buying your Home
Many new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the loan is approved. Until closing, there still remain some hurdles to jump. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't buy luxury items. You may be itching to turn your new living room into a showplace, or celebrate your new dream home, but stay away from major purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. Using cash to buy big-ticket items can even be a problem: many lending institutions consider your available cash when approving your mortgage loan.
Don't look for a new career. Your recent job history should show consistency. Getting a new job before you apply for a loan may not jeopardize your approval at all. But in some cases, changing careers during the loan approval process could bring concern and hinder your application.
Don't move cash around or switch banks. Bank statements from the last few months for accounts in your name (checking, savings, money market, and others) will probably be reviewed as the lender considers your mortgage application. Your lending institution wants to see a consistent rise and fall of your funds over the pay period, in order to avoid fraud. Even for practical purposes, transferring money or switching banks might make it difficult for the lending institution to confirm your bank history.
Don't give your FSBO (for sale by owner) seller earnest money, made out directly to him. Until closing, the good faith deposit remains yours. Although some individual sellers might not know this, the good faith funds should be applied to your closing expenses. An attorney or other type of neutral party can hang onto your earnest funds, or you may place them temporarily into a trust account until you close. If your transaction fails, the contract with the seller should document where this good faith funds should go.
At Stepping Stone Mortgage, we answer questions about this process every day. Call us at (541) 683-3300.