Things to Avoid While Purchasing a New Home
What's more fun than buying a bunch of new furnishings to go in your future home? Nothing. But making big purchases before your loan closes could be trouble. Until the house is really yours, there still remain some hoops to jump through. We have listed some things below you will want to stay away from when waiting for your loan to close.
Don't buy luxury items. It may be tempting to buy that new easy-chair for the soon-to-be-yours parlor, but it's best to avoid making large purchases like furniture, appliances, electronic equipment, or vacations until closing. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. Because lenders are looking closely at your financial accounts, a large cash purchase is also not advised.
Don't go on a career search. Your recent job history should show consistency. Getting a new career before you start the application process for a mortgage loan may not compromise your approval at all. However, switching careers during the loan process may affect your approval.
Don't switch your accounts to a new bank or move around your cash. Your lending institution will require you to produce recent bank statements on all of your accounts: savings, checking, money market, and other assets. In order to eliminate fraud, lenders require clear documentation of how you earn your money and where any additional wealth comes from. No matter the purpose, changing banks or transferring money may raise a red flag with the lender and impede your approval process.
Don't give cash directly to your seller (usually in the case of of "for sale by owner") for earnest money. As a rule, your good faith money is yours, not the seller's until closing. The earnest funds are to go toward your expenses closing; your FSBO seller might not realize this. We recommend that you put the money into a trust account, or get an attorney to hold it until the deal closes. The purchase agreement should document who gets the money if the transaction fails.
Sky Apply Mortgage, Inc can answer questions about these "Don'ts" and many others. Give us a call: (813) 200-7931.
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