Don't Trip Yourself up While Buying a Home
What's better than getting a bunch of new furnishings to adorn your future home? Nothing. But making big purchases before closing could be trouble. Until closing, there are still some hurdles to jump. Below you'll find a list of things to stay away from during this critical time of your home purchase.
Don't make expensive purchases. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but stay away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Using cash to purchase expensive items can also be a bad idea: many lenders consider your cash reserve when approving your loan.
Don't go on a job search. Your recent career history should show stability. Finding a new job (particularly one with a better salary) may not jeopardize your ability to qualify for a loan. However, if you switch careers before you qualify, your process could fail or be stalled.
Don't take your accounts to a new bank or move around your cash. Bank statements from the last few months for accounts in your name (checking, savings, money market, and other assets) will be analyzed as the lending institution makes decisions regarding your application. In order to avoid fraud, lenders will need clear documentation of how you earn your money and where additional wealth comes from. No matter the purpose, switching banks or transferring funds might raise a red flag with your lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith deposit does not belong to the seller: it remains yours until the sale closes. The good faith funds are to be applied to your expenses closing; some sellers might not know this. A neutral party, like an attorney can hang onto your deposit, or you may put it temporarily into a trust account until you close. If your home purchase fails, your contract with the seller should specify to whom the good faith funds should go.
Acceptance Capital Mortgage Corporation can walk you through the pitfalls of getting a mortgage. Call us: (337) 453-0012.