Don't Trip Yourself up While Buying a New Home
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In the rush of excitement that comes with an accepted offer and a "yes" from the lender, many homebuyers make the error of taking their enthusiasm straight to the mall or appliance store. There are still a few major hurdles to jump before closing. Below you'll find a list of things to avoid during this crucial time of your home purchase.
Don't empty your wallet on big-ticket items You may be itching to turn your new kitchen into a showplace, or celebrate your new castle, but keep away from expensive purchases like furniture, jewelry, appliances, or vacations until your loan closes. Using plastic to buy new living room furniture could jeopardize your loan process by altering your numbers dramatically. It's also a bad idea to make those big-ticket purchases using cash. Lending Institutions are examining your cash on hand when considering your loan.
Don't go on a career search. Consistency in your job history is a positive thing to lenders. Changing jobs may not affect your ability to qualify for a mortgage loan - especially if you are improving your salary. However, switching careers during your application process could influence your approval.
Don't move finances around or switch banks. Most lenders will require you to submit recent bank statements for your accounts: savings, checking, money market, and other assets. In order to detect fraud, lenders need clear documentation of how you earn your living and where any additional money comes from. No matter the reason, changing banks or moving funds from one account to another might raise a red flag with your lender and impede your approval process.
Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your earnest money does not belong to the seller: it remains yours until closing. The earnest funds are to be used for your expenses closing; some sellers might not know this. It's wise to put the money into a trust account, or get a neutral party, like an attorney, to hold it until the deal closes. Your contract should dictate who keeps the money if the home purchase does not go through.
At Willow Bend Mortgage, we answer questions about this process every day. Give us a call: (256) 734-6012.