Don't Trip Yourself up While Buying a New Home
In the rush of excitement that comes with an accepted offer and a "yes" from the lender, some homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. It's best to remember that until you get the keys, your lender is watching you very closely. Here are some things to avoid before closing to be sure your transaction goes well.
Don't make expensive purchases. You may be tempted to order that new sofa for the soon-to-be-yours parlor, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or vacations until closing. Financing your bedroom furniture with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lenders are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't go on a job search. Your recent career history should show stability. Getting a new career before you start the application process for a loan may not jeopardize your approval at all. But in some cases, getting a new job during the loan approval process could raise concern and hinder your approval.
Don't move cash around or change banks. Bank statements from the last few months for your accounts (savings, checking, money market, and other accounts) will likely be analyzed as the lender makes decisions regarding your mortgage application. To detect potential fraud, most loans require detailed paperwork to document the source of all cash. Even for practical reasons, transferring finances or switching banks could make it difficult for the lending institution to verify your bank history.
Don't give money directly to your seller (commonly in cases of "for sale by owner") for earnest money. Your good faith money does not belong to the seller: it remains yours until closing. The good faith money is to go toward your expenses upon closing; a FSBO seller might not realize this. An attorney or other type of neutral party can hold onto your deposit, or you may put it temporarily into a trust account until you close. The purchase agreement should dictate to whom the money goes if the transaction falls through.
Team Funding Group can walk you through the pitfalls of getting a mortgage. Give us a call: (925) 627-1400.