Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the lender approves their loan. It's best to remember that until closing, your lender is watching your accounts very closely. We have given you a list of things below you will want to stay away from when waiting for closing.
Don't buy luxury items. You may be tempted to buy that new Turkish rug for the soon-to-be-yours den, but it's best to avoid making large purchases like furniture, appliances, jewelry, or cars until closing. You may send up red flags with your lender if you buy your appliances on your credit cards during your loan process. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't get a new job. Lenders feel comfortable seeing a consistent work history on your paperwork. Finding a new career (especially one with a bigger salary) may not jeopardize your ability to qualify for a loan. But for some, changing careers during the mortgage approval process may bring concern and hinder your application.
Don't switch your accounts to a new bank or move around your finances. Bank statements from the last two or three months for your accounts (savings, checking, money market, and other accounts) will probably be studied as the lender considers your loan application. Your lender will need to see a steady flow of your money over the pay period, in the interest of ruling out fraud. Even for innocent purposes, moving around funds or changing banks could make it difficult for the 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. As a rule, your good faith money belongs to you, not the seller up until closing. The FSBO seller may not realize that this good faith money is to be applied to your expenses at closing. Find a lawyer or other neutral party who will hang on to the funds or place them in a trust account until closing. Should your sale fall through, your purchase contract should indicate to whom this good faith deposit should go.
At VSI Home Lending, we answer questions about this process every day. Call us: 2603382561.