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 the loan. Until the keys are handed over, there still remain some hoops to jump through. Below you'll find a list of things to stay away from during this crucial time of your home purchase.
Don't overspend on big-ticket items
You may be itching to turn your new living room into a home magazine cover, or celebrate your new castle, but keep away from big purchases like furniture, jewelry, appliances, or vacations until closing. Using plastic to buy furniture could compromise your lending process by altering your numbers dramatically. Because lenders are looking closely at your financial accounts, a large cash purchase is also a bad idea.
Don't go on a job search
Lending Institutions look for a consistent career history on your application. Finding a new career (especially one with a better paycheck) may not hinder your ability to qualify for your loan. However, if you switch careers before you qualify, your mortgage process could fail or be bogged down.
Don't move finances around or change banks
As the lender considers your mortgage application, you will probably be instructed to produce bank statements for the last two or three months for your checking accounts, savings accounts, money market funds and other liquid assets. Your lender is looking for a consistent rise and fall of your money over the month, in order to avoid fraud. Switching banks or moving money elsewhere - even if its merely to consolidate funds - may hinder the documentation of your funds.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money
Until the completion of the deal, any good faith deposit remains yours. Although your seller may not understand this, your good faith money must be applied to the buyer's closing expenses. We recommend that you put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The disposition of good faith funds, if your home purchase fails, should be documented in the purchase agreement with your seller.
Bob can guide you through the hurdles of getting a mortgage loan. Give him a call at (209) 470-7161.
