Don't Trip Yourself up While Buying a Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home as soon as the seller says "yes" and the lender approves the loan. Until your keys are in hand, there still remain some hurdles to jump. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't throw your money around. You may be itching to turn your new kitchen into a showplace, or celebrate your new dream home, but keep away from big purchases like furniture, jewelry, appliances, or vacations until your loan closes. Financing your furniture with a store card or a bank credit card could put your credit worthiness at risk when you need it the most. Because lending institutions are looking closely at your bank accounts, a large cash purchase is also a mistake.
Don't look for a new career. Lenders like to see a consistent career history on your application. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, if you switch careers before your loan is approved, your loan process could fail or be stalled.
Don't switch banks or move finances around in your accounts. Your lending institution will require you to submit recent bank statements of your accounts: savings, checking, money market, and other liquid assets. To eliminate fraud, lenders need a clear and consistent picture of how you earn your money and where additional wealth comes from. No matter the purpose, switching banks or moving funds from one account to another can raise a red flag with your lender and slow down your loan process.
Don't give your FSBO (for sale by owner) seller earnest money, cash in hand. Your good faith money does not belong to the seller: it remains yours until closing. Any good faith money is to be used for your expenses closing; some sellers may not understand this. It's best to put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the deal closes. If your sale falls through, the contract with the seller should indicate to whom your good faith funds should go.
At Contemporary Mortgage Services, Inc, we answer questions about this process every day. Call us at 407-834-3377.
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