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 error of carrying their enthusiasm straight to the mall or appliance store. Until closing, there are still some hoops to jump through. We have listed some things below we suggest you stay away from when waiting for closing.
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 dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until the loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using credit cards. It's also a mistake to make those big-ticket purchases with cash. Lenders are examining your available cash when considering your loan.
Don't get a new career. Lenders look for a consistent work history on your application. Finding a new career (particularly one with a bigger paycheck) may not jeopardize your ability to qualify for a mortgage loan. But for some people, changing jobs during the loan application process might raise concern and hinder your approval.
Don't move cash around or switch banks. Most lenders will ask for recent bank statements of accounts in your name: savings, checking, money market, and other liquid assets. The lending institution is looking for a consistent flow of your funds over the pay period, in order to avoid fraud. Changing banks or moving funds to another account - no matter the reason - might make it harder for your lender to document your funds.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. As a rule, your good faith deposit is yours, not the seller's until closing. Some sellers may not realize that any good faith funds must go toward your expenses at closing. Find an attorney or other neutral party who is able to hang on to the funds or put them in a trust account until closing. The disposition of good faith money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
Mason Mortgage Advisors can walk you through the pitfalls of getting a mortgage. Give us a call: 314-395-8300.
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