Don't Trip Yourself up While Buying a New Home
With the thrill that comes with an accepted offer and a "yes" from the lender, some homebuyers make the mistake of carrying their enthusiasm straight to the mall or furniture store. Until your keys are in hand, there still remain some hurdles to jump. We have given you a list of things below you will want to avoid when waiting for your loan to close.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from major purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your lender may send up red flags if you purchase new furniture on your credit cards during your loan process. Using cash to buy expensive items can also be a problem: most banks consider your available cash when approving your mortgage.
Don't look for a new career. Stability in your career history is a positive thing to banks and other lenders. Changing jobs may not compromise your ability to qualify for a loan - especially if you are getting a bigger paycheck. However, if you switch careers before approval, your process could fail or be bogged down.
Don't take your accounts to a new bank or move around your finances. Your lender will ask for recent bank statements for your accounts: savings, checking, money market, and other liquid assets. The lender will need to see a consistent flow of your money over the pay period, in order to avoid fraud. Even for practical purposes, transferring finances or switching banks may make it more difficult for your lender to verify your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. Your good faith deposit does not belong to the seller: it remains yours until the transaction is final. Although your FSBO seller may not know this, your earnest money must go toward your closing expenses. A neutral party, like an attorney can hold onto your funds, or you may put them temporarily into a trust account until you close. If your home purchase fails, the contract with the seller should specify to whom this earnest money should go.
At VSI Home Lending, we answer questions about this process every day. Give us a call at 2603382561.