Don't Trip Yourself up While Buying your New Home
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Lots of new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller says "yes" and the loan is approved. Until your loan closes, there are still some hurdles to jump. Here are some actions to refrain from during the home buying process to assure your transaction goes smoothly.
Don't overspend on big-ticket items You may be itching to turn your new living room into a showplace, or celebrate your new castle, but keep away from big purchases like furniture, cars, appliances, or vacations until the loan closes. Using plastic to buy furniture could jeopardize your lending process by changing your numbers dramatically. Using cash to purchase big-ticket items can even create a mistake: most banks take into consideration your available cash when approving your mortgage.
Don't go job hunting. Stability in your work history is a good thing to banks and other lenders. Finding a new career (particularly one with a bigger paycheck) may not hinder your ability to qualify for your mortgage loan. However, finding a new job during the application process could influence whether or not you are approved.
Don't switch your accounts to a new bank or move around your money. As the lender considers your mortgage application, you will likely be instructed to provide bank statements for recent months on your saving and checking accounts, money market accounts and other liquid wealth. The lender is looking for a consistent rise and fall of your funds over the month, in order to rule out fraud. Switching banks or moving money elsewhere - even if its just to pool funds - might hinder the review of your accounts.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. Until the completion of the deal, any good faith money remains yours. Any earnest funds are to go toward your expenses upon closing; some sellers might not know this. An attorney or other type of neutral party can hold onto your earnest money, or you may put it temporarily into a trust account until you close. The disposition of good faith money, in the case of a failed transaction, should be specified in the purchase agreement with your seller.
At American Fidelity, we answer questions about this process every day. Give us a call: 8137665149.