Don't Trip Yourself up While Buying your New Home
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What's better than getting a bunch of new furniture to go in your future home? Nothing. But buying big ticket items before closing could be trouble. Until the house is really yours, there are still some hurdles to jump. Below you'll find a list of actions to avoid during this crucial time of your home purchase.
Don't buy luxury items. Although you may be listing ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Using credit cards to buy new living room furniture could compromise your lending process by altering your numbers dramatically. It's even a mistake to make those large purchases using cash. Lenders are looking at your cash on hand when considering your loan.
Don't get a new job. Your recent job history should show stability. Getting a new career before you apply for a loan may not jeopardize your approval at all. However, if you switch careers before approval, your mortgage process could fail or be bogged down.
Don't change banks or move finances around in your bank accounts. Your lender will require you to produce recent bank statements for your accounts: checking, savings, money market, and other liquid assets. To eliminate potential fraud, most lenders want a thorough paper trail to verify the source of all cash. No matter the purpose, moving banks or moving money from one account to another might raise a red flag with the lender and impede your qualification process.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, delivered to his door. As a rule, your earnest money belongs to you, not to the seller until the deal closes. Your earnest funds are to go toward your expenses closing; some sellers may not know this. You'll want to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. The contract should document to whom the deposit goes if the home purchase does not go through.
Security Mortgage Co can walk you through the pitfalls of getting a mortgage. Call us: 972.359.7766.