Don't Trip Yourself up While Buying your Home
What's better than buying a bunch of new furniture to go in your future home? Not much. But buying big ticket items before closing could be trouble. Keep in mind that until you get the keys, your lender is watching your accounts very closely. Below you'll find a list of actions to stay away from during this crucial 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 castle, but stay away from expensive purchases like furniture, cars, appliances, or vacations until closing. Your credit numbers could change suddenly if you make a huge purchase using credit cards. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Lenders like to see a consistent career history on your paperwork. Changing jobs may not compromise your ability to qualify for a loan - particularly if you are going to be making more money. But in some cases, getting a new career during the mortgage loan approval process may bring concern and hinder your approval.
Don't switch your accounts to a new bank or move around your cash. Bank statements from the last two or three months for accounts in your name (savings, checking, money market, and others) will probably be analyzed as the lending institution makes decisions regarding your mortgage application. To avoid potential fraud, most lending institutions want thorough paperwork to verify the source of all incoming funds. No matter the purpose, moving banks or transferring funds could raise a red flag with the lender and slow your application process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Until the sale is complete, any good faith deposit actually belongs to you. Although your seller may not know this, any good faith money should be applied to the buyer's closing expenses. Find an attorney or other neutral party who can hold the money or place it in a trust account until you close. The disposition of earnest funds, in the case of a failed transaction, should be indicated in the purchase agreement with your seller.
VSI Home Lending can answer questions about these "Don'ts" and many others. Call us at (260) 338-2561.