Don't Trip Yourself up While Buying a New Home
Many new homebuyers make the mistake of rushing out to buy things to fill their home soon after the seller accepts their offer and the lender approves the loan. There are still a few major hurdles to jump before closing. Below you'll find a list of actions to stay away from during this critical time of your home purchase.
Don't empty your wallet on big-ticket items Although you will be dreaming of ways to turn your new home into a castle, try to stay away from big ticket purchases like appliances, electronics, or furniture. You will also want to stay away from vacations and vehicle purchases until the closing of your loan. Financing new stainless steel appliances with a store card or a bank credit card could jeopardize your credit worthiness when you need it the most. Because lending institutions are reviewing your bank accounts, a large cash purchase is also not advised.
Don't look for a new career. Your recent job history should show stability. Changing jobs may not affect your ability to qualify for a loan - particularly if you are going to be making more money. But in some cases, getting a new job during the loan application process might raise concern and hinder your approval.
Don't take your accounts to a new bank or move around your money. As the lender reviews your mortgage application, you will probably be asked to submit bank statements for the last few months for your saving and checking accounts, money market accounts and other liquid assets. Your lender looks for a steady flow of your money each month, in the interest of avoiding fraud. Even for innocent reasons, transferring cash or switching banks might make it difficult for your lender to document your account history.
Don't give your FSBO (for sale by owner) seller a "good faith" deposit, cash in hand. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Your seller might not realize that any good faith funds is to be used for your expenses upon closing. We recommend that you put the deposit into a trust account, or get a neutral party, like a lawyer, to hold it until the closing of the sale. The disposition of good faith money, if your transaction falls through, should be specified in the contract with the seller.
At Net Equity Financial Mortgage, we answer questions about this process every day. Give us a call: (215)741-3131.