Don't Trip Yourself up While Buying your Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. Until the house is really yours, there are still some hoops to jump through. We have given you a list of things below we suggest you avoid when waiting for closing.
Don't overspend on big-ticket items Although you will be listing ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or furniture. You will also want to keep away from vacations and car purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a red flag to make those huge purchases using cash. Lenders are examining your cash on hand when considering your loan.
Don't look for a new job. Your recent job history should show stability. Finding a new job (especially one with a bigger paycheck) may not jeopardize your ability to qualify for your loan. However, getting a new career in the middle of your application process could affect whether or not you are approved.
Don't switch banks or move money around in your accounts. Your lending institution will ask for recent bank statements for accounts in your name: checking, savings, money market, and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to verify the source of all funds. Even for practical reasons, moving around money or switching banks may make it more difficult for the lending institution to document your bank history.
Don't give cash directly to your seller (commonly in the case of of "for sale by owner") to be considered a "good faith" deposit. Until the sale is complete, any good faith deposit actually belongs to you. Some FSBO sellers may not know that any good faith funds must be used for your expenses upon closing. An attorney or other type of neutral party can hold onto your earnest funds, or you may put them temporarily into a trust account until closing. The final disposition of earnest funds, in the case of a failed transaction, should be documented in the purchase agreement with the seller.
Stepping Stone Mortgage can answer questions about these "Don'ts" and many others. Give us a call at (541) 683-3300.