Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the loan is approved. There still remain a few major hurdles to jump before closing. We have listed some things below we suggest you stay away from when waiting for your loan to close.
Don't overspend on big-ticket items Although you may be dreaming of ways to turn your new house into a castle, try to stay away from major purchases like appliances, electronics, or expensive furnishings. We also recommend that you keep away from vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. Because lenders are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Your recent work history should show stability. Finding a new job (particularly one with a bump in salary) may not hinder your ability to qualify for a mortgage. However, if you switch careers before your loan is approved, your process could fail or be bogged down.
Don't take your accounts to a new bank or move around your money. Your lending institution will require you to provide recent bank statements for your accounts: savings, checking, money market, and other liquid assets. Your lending institution is looking for a steady rise and fall of your money over the month, in order to avoid fraud. Changing banks or moving funds to another account - even if its just to pool funds - might hinder the review of your funds.
Don't hand over a "good faith" deposit directly to the seller in a FSBO (for sale by owner) purchase. Until the sale is complete, any good faith deposit remains yours. Although your seller may not understand this, any earnest money must be used for your closing expenses. Find a lawyer or other neutral person who is able to hang on to the money or place it in a trust account until you close. The contract should dictate who keeps the earnest funds if the home purchase falls through.
At Great Mortgage NMLS#478647, we answer questions about this process every day. Give us a call: 708.966.9005.